Tax credits disregard limit.

mumofboys18 · 14 June 2018 at 11:29AM

Good Morning,

I'm trying to work out if I will end up with an overpayment after renewal.

2016/2017 income was £18010.
2017/2018 estimated income was £22,000 but actual £23800 so £1800 more.

Tax credits have put £24300 for estimated 2018/2019 and adjusted payments accordingly. Will the additional £1800 cause an overpayment or will the diregard limit stop this?

Thanks

Icequeen99 · 14 June 2018 at 11:35AM

mumofboys18 wrote: »

Good Morning,

I'm trying to work out if I will end up with an overpayment after renewal.

2016/2017 income was £18010.
2017/2018 estimated income was £22,000 but actual £23800 so £1800 more.

Tax credits have put £24300 for estimated 2018/2019 and adjusted payments accordingly. Will the additional £1800 cause an overpayment or will the diregard limit stop this?

Thanks

yes, the £1800 will cause an overpayment because the disregard is used up against the difference between 18,010 and 22,000 already. Depending on when you told them of the £22,000, there may be an overpayment already.

IQ

Darksparkle · 14 June 2018 at 11:39AM

The disregard applies when comparing your income to the previous year, not the estimate you have provided.

So if 2016/17 was £18,010 and you estimated £22,000 your tax credits for 2017/17 would have been calculated on £19,500.

Now you have updated the revised figure to £23,800 your tax credits for 2017/18 will be recalculated based on £21,300.

The overpayment will be approx £740.

Tax credits for 2018/19 will be based on £23,800 unless your 2018/19 income increases/decreases by more than £2,500.

mumofboys18 · 14 June 2018 at 11:45AM

Thanks for the quick replies.

That makes sense. £700 isn't too bad I guess. Whats the best way to try avoid over payments? over estimating income? thanks

Darksparkle · 14 June 2018 at 11:50AM

I would always suggest over estimating yes.

Myke23 · 15 June 2018 at 12:21PM

Hello all,
I just joined today. I'm a single father with a 15 year-old child. I receive Tax Credits which are Child Tax Credits. I joined the scheme when I was working part-time quite a bit and estimated this last tax year (4/17 - 4/18) earnings to be approx £8000.
In actual fact I only earned £3900. About to send new Declaration back - question is:

Should I have told them my earnings were low?
I didn't - I was always waiting for work to come in but it dried up. So estimate was double what i actually earned. Will I now face problems? Will this mean an Overpayment/ or underpayment from them for this last year to now ?

Thanks
Myke

Darksparkle · 15 June 2018 at 2:11PM

What was your 2016/17 income?

How many hours have you told them you work per week?

Myke23 · 15 June 2018 at 4:20PM

In 2016 I had a full-time job until june, then a part-time job until christmas 2016, then nothing most of 2017- so it was a patchy financial year. Overall it was £10,500.00

Went from 36 per week, then 24, then none at all.

Icequeen99 · 15 June 2018 at 4:22PM

Myke23 wrote: »

In 2016 I had a full-time job until june, then a part-time job until christmas 2016, then nothing most of 2017- so it was a patchy financial year. Overall it was £10,500.00

Went from 36 per week, then 24, then none at all.

As DS says, it depends how many you told tax credits. If you didn't tell them when your hours dropped below 16 you may have an overpayment of working tax credit (unless you never claimed it in the first place). You might not be receiving any WTC but it might be included in the calculation, you should see it on your award notice.

IQ

Tax credits disregard limit.

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