When would tax credits be updated after having baby?

luluyum

My husband and I are trying to plan ahead before trying for a second baby, by attempting to calculate the tax credits that would be available.

We both currently work, but if we did have another child there would be no financial reasoning in me returning due to high childcare costs.

My question is: after my 9 months maternity pay had stopped and I rang up to inform the HMRC I was now unemployed, would the credits be updated straight away?

I'm confused as I know they calculate the credits from your previous years earnings, but obviously the money wouldn't be coming in the same way it had the year before.

Can anybody shed a light on this? The Tax credits office and CAB don't seem to be able to help at all!!

Thanks

System

It would be updated straight away though it's up to you to recalculate your estimated income for that particular tax year especially if you think it will be less than what you actually received in the previous tax year.

mitchaa

Depends on your partners income.

If he earns more than around £21k, any additional children wouldn't make the blindest bit of difference as you would only be receiving the basic £545 child element anyway and not be entitled to any additional child elements.

(Although you do receive a £545pa baby element as soon as you have another for the 1st year only)

luluyum

Thanks so much Pam17. It's really appreciated

luluyum

Thanks for your great advice Mitchaa

flea72

as soon as you start receiving mat pay, ring them up to tell them your change of circumstances, and give them a rough idea on what your income for that financial year will reduce to. its fairly easy to work out based on your pay slips since april, plus 6wks at 90% pay, and then 33 weeks at £17 (you discount £100 of the £117 SMP you get).

however, depending on when baby is born, you may have to split these figures over two tax years. for ease on mental arithmetic (baby brain plays havoc lol), i suggest keeping it all within the same tax year, so aim for an April/May baby :rotfl:

then when baby is born, contact them again, so the child can be added,and you will then get another revised award

then contact them again, once your SMP stops, and let them know you are now unemployed. this however shouldnt affect your tax credit award, as you should have allowed for the fact you wouldnt be having any income, when you gave them your rough income figures at the start of the tax year.

hth Flea

heather38

if it's anything like mine the following april. i had my DD oct 06, we sent off the paperwork but from oct 06-march 07 the award was based on the april 05/march 06 wages, so even though i was i was on smp i didn't get that much for the 1st few months