query??

Auzelia

Your award will initially be based on your income for the previous tax year.

If your income in the current tax year rises by less than £25,000, it will not affect your award and we will still base it on your income for the previous year. So for the current year, you will get the benefit of a rise in income up to that amount without it reducing your tax credit award. The increased level of income is not taken into account until the next year.

Does that mean that the £400 I was paid over what I declared last year will not make any difference (i.e I wont have to pay any WTC and CTC back)
or will this still come under an over payment?

You should tell us immediately if you think that your income will rise by more than £25,000 in the current tax year. This will help you to avoid an overpayment of tax credits which you would have to pay back after we finalise the award at the end of the year.

Thanks

[Deleted User]

As long as you never call up to lower your estimated earnings you have this "buffer" of £25k, so that means the extra you earned above your estimate will not mean you have been overpaid in the previous tax year's award.

You are best to inform of any income increases during the year though as they use this figure to calculate your provisional payments at the start of the following tax year.

Auzelia

Thanks, I gave them the figure I had last year, and have been paid 400£ more than I gave them, but I was also on maternity leave for 5 weeks last tax year so that means I can take £500 off that total leaving me with £100 less than what I quoted them.

How does that work?

Would I tell them the figure and then give them a new expected earnings total of what I actually had last tax year.

It is all so confusing.

Thanks

jo6

Hi my income went up 15000 what way will that effect my claim will i have to pay it all back Husband went self employed and didnt realise until tax return done???

mitchaa

Surely this £25000 is open to abuse?

Cant you declare your earnings of say £40,000 as £15,001 in order to qualify for tax credits and you would still be in the £25000 window and not be penalised (Earning £24,999 over)

Tax credits at £15000 will be a hell of a lot more than what they would at £40k (In fact you dont get any with this kind of income apart from family £545 element of CTC)

So what am i missing? Its not fraud as the £25,000 buffer is clearly in place?

Surely its not that easy, or im obviously missing something blindingly obvious??:rotfl:

terryw

mitchaa wrote: »

Surely this £25000 is open to abuse?

Cant you declare your earnings of say £40,000 as £15,001 in order to qualify for tax credits and you would still be in the £25000 window and not be penalised (Earning £24,999 over)

Tax credits at £15000 will be a hell of a lot more than what they would at £40k (In fact you dont get any with this kind of income apart from family £545 element of CTC)

So what am i missing? Its not fraud as the £25,000 buffer is clearly in place?

Surely its not that easy, or im obviously missing something blindingly obvious??:rotfl:

Surely it is not just a declaration of anticipatedearnings but your actual earnings for the previous year?

terryw

mitchaa

terryw wrote: »

Surely it is not just a declaration of anticipatedearnings but your actual earnings for the previous year?

terryw

It is supposed to be yes, but more often than not people are changing their circumstances left right and chelsea with just a phone call with anticipated earnings for that coming year instead of using previous years income due to a change in circumstance

Ie job change, maternity etc.

I could surely change my job for another and then tell them i earned £24999 less than i did in order to gain benefit. All within the law (I think anyway)

Before anyone starts, i am not planning on leaving my job, im just intrigued on this £25000 disregard figure as to me it seems well excessive and if my thinking above is correct, open to a whole load of abuse.

peediedj

subsoniccoyote wrote: »

As long as you never call up to lower your estimated earnings

what happens if you call up to lower your earnings then????