25k disregard?

mrs_angry

i posted on another thread that i had been offered a new job and i now want to know how this will affect my tax credits claim.

i have already sorted out this years claim on last years earnings me and the hubby earned £20960.00

now i have been offered a job working full time and this will give us anything extra from £12577.00- £15523 (not sure as it works on bands!)

i have been reading about this £25k disregard and wondered if that would apply to my claim, not much extra money but sure would help with this credit crunch!

i was told that i would need to report to tax credits my new job as it is a change in circumstances, but that they would keep my claim as it stands untill april next year!

can this be correct, very confusing! i am trying to decide if i should accept this new job am presently a part time cleaner and have 3 children aged 5, 8, 10 so have to work out my finances

kind regards in advance

JessicaF_2

Hi

Your joint earnings for 2007-2008 were £20960. This means that your tax credits from 6th April 2008 for the 2008-2009 tax year (that you are receiving now) should be based on 20960.

If you take the job your 2008-2009 total income will increase. However this will not impact on your current tax credit award (2008-2009).

Your 2008-2009 will be finalised next summer based on a comparison between actual 2008-2009 income and previous year income (2007-2008). Providing your 2008-2009 joint income has not risen by more than 25,000 compared to 2007-2008 your 2008-2009 tax credits will be finalised still using 20960.

However there are a couple of warnings to be attached to this:

1. You still need to inform tax credits of your new job and income. This is because they need to have your up to date income information for April 2009 when the 2009-2010 tax year starts. If they don't you will be overpaid for th first few months of 2009-2010.

2. Your tax credits will fall in 2009-2010 - this is because from April 2009 your tax credits will be based on your actual income for 2008-2009 which will your 20960+your income from new job.

3. If you have reported an estimated income for this year 2008-2009 which turns out to be too low, you are not protected by the disregard.

I would go and see a CAB or similar if you are worried. Just make sure you keep HMRC up to date with your income changes (even if it doesn't impact on this years awarD) and keep a note of date, time and name for any phone calls made to them.

Jess

mrs_angry

thankyou very much you made that very clear to me, and even though my tax credits will drop next year it will make this year more comfortable and it all counts! plus i will be getting a new career!