Tax Credits?

kyh

I am wondering if it is worth me applying for child tax credits. Last year both my husband and I were working full time and my daughter was in FT child care. In April this year I was relocated with work and the childcare in the new area means it is actually cheaper for my husband not to work than for us to put her in FT care again - stupid I know! He would have been going to work to pay for his petrol to get to work and her child care fees!! He is now at home looking after her and she goes in for 3 x 4 hour sessions per week for which I have to pay £261 per month (I use child care vouchers for £243 of this) she is not entitled to her "free" 12 1/2 hours a week until December. I want her to stay in nursery as she really enjoys it - my husband is now a "house Husband" and does not claim any form of benefits. Although we can just about afford to get by on my wage in this situation it is tight.

My question is - if i claim is it going to be "worth it" - I don't want to end up having to pay them loads of money back because they have overpaid us but I know it would be based on last years income for this years payment and next year would be based on this years lower income - help! My current wage I suspect will put us in the lowest entitlement bracket anyway.

hm71_2

I always work on the premise -nothing ventured nothing gained- you could perhaps do a quick runthrough on entitledto.co.uk and see what that brings up. To be honest you have to be earning quite a lot not to qualify at all so I would try it. when I first claimed I doubted hubby & I would be entitled I went to my local tax office for help with the forms and all though we only recieve a small amount- it all helps. There is a question on the form about do you expect last years income to be more/less. not that exact phrasing. or try http://www.hmrc.gov.uk/taxcredits/do-you-qualify.htm

kyh

thanks - just tried entitled to but it said we are not because not enough hours worked which kind of makes me laugh because my husband can only do freelance at the moment when we can afford to pay the extra to put her into nursery longer! He isn't working because FT childcare is too expensive - ironic - if we could afford more childcare he could find another job and then we still wouldn't be entitled!! I work over 45 hours a week on a normal week and when i have to go away from home to work I can be out of the country for up to 10 days so he is on his own with her and again can't work at his old job because wouldn't be back in time to collect her - madness!!

hm71_2

not enough hours? perhaps go onto the hmrc website. and try their qualify questionaire. I've never heard of that especially if you are working 45 hrs a week. entitled to is a guideline really but I usually find them to be farely accurate. don't really know what else to say to you.

mitchaa

kyh wrote: »

I am wondering if it is worth me applying for child tax credits. Last year both my husband and I were working full time and my daughter was in FT child care. In April this year I was relocated with work and the childcare in the new area means it is actually cheaper for my husband not to work than for us to put her in FT care again - stupid I know! He would have been going to work to pay for his petrol to get to work and her child care fees!! He is now at home looking after her and she goes in for 3 x 4 hour sessions per week for which I have to pay £261 per month (I use child care vouchers for £243 of this) she is not entitled to her "free" 12 1/2 hours a week until December. I want her to stay in nursery as she really enjoys it - my husband is now a "house Husband" and does not claim any form of benefits. Although we can just about afford to get by on my wage in this situation it is tight.

My question is - if i claim is it going to be "worth it" - I don't want to end up having to pay them loads of money back because they have overpaid us but I know it would be based on last years income for this years payment and next year would be based on this years lower income - help! My current wage I suspect will put us in the lowest entitlement bracket anyway.

Depends on your income, but i doubt you will get any help towards childcare due to your child only being PT in the nursery, ie £261pm. This only works out at around £60pw.

I remember doing a few quick calculations a little while ago and on a £40k salary you would have to be paying over £175pw for childcare and you would get a little help, not a lot, about £30pw from what i remember. Anything under this £175pw and you got no award.

You will be saving money due to your £243 salary sacrafice anyway. That works out at £75.33pm savings due to taxation/NI savings.

So £243 worth of CC vouchers actually only cost you £167.67 in real money + your £18pm over payment (£261-243) So real costs to you are £185pm.

If you did try to claim through the TC system you would obviously then be liable for the full £261 as opposed to your current £185 as you cannot use them both together.

I would think in your case that the voucher scheme would work out better for you than CC through tax credits anyway.