can you be entitled to working tax credit for part of the year?
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octavius0
Posts: 9 Forumite
Hello!
we've been informed we owe a significant sum due to tax credit overpayment. we were part of a joint claim and my partner did not update the info when I began employment again (I work as a contractor, sometimes go many months between contracts).
On the decision TC have said we were not entitled to working tax credit for the entire year, due to total joint income and thus the wtc payments are included in the overpayment.
As I was only employed for half of the year, was my partner not then entitled to wtc for my period of unemployment?
She meets all the criteria for it (hrs worked, amount earned etc). I understand she is not entitled to it because of total income, but we did not have that income when she was receiving it as I was not working for part of the year... :undecided
Also, their ''anualised'' income figure for us is wrong by over £1,000, when I explained it to them with evidence they said it was ''based on information supplied by employers which we then anualise'' to get a figure for the year.
But if it's incorrect, surely it's incorrect?
Finally, how are these people on repayments?
Can we pay back in small amounts monthly?
THanks for any replies.
we've been informed we owe a significant sum due to tax credit overpayment. we were part of a joint claim and my partner did not update the info when I began employment again (I work as a contractor, sometimes go many months between contracts).
On the decision TC have said we were not entitled to working tax credit for the entire year, due to total joint income and thus the wtc payments are included in the overpayment.
As I was only employed for half of the year, was my partner not then entitled to wtc for my period of unemployment?
She meets all the criteria for it (hrs worked, amount earned etc). I understand she is not entitled to it because of total income, but we did not have that income when she was receiving it as I was not working for part of the year... :undecided
Also, their ''anualised'' income figure for us is wrong by over £1,000, when I explained it to them with evidence they said it was ''based on information supplied by employers which we then anualise'' to get a figure for the year.
But if it's incorrect, surely it's incorrect?
Finally, how are these people on repayments?
Can we pay back in small amounts monthly?
THanks for any replies.
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Comments
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No, its annual income.
If I was unemployed all year and then worked for one week and got £40k for that week, Id need to pay back all my WTC.0 -
Plus don!!!8217;t they base each year on the previous years income?0
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Plus don!!!8217;t they base each year on the previous years income?
It's based on the previous years income unless the current year income increases or decreases by £2500.
OP can you explain a bit more about what you mean by annualised income? What tax year are you referring to and is it wrong for you or your partner?0 -
Finally, how are these people on repayments?
Can we pay back in small amounts monthly
It is possible to spread repayment but they will want to know something about your current situation. What you consider a small monthly amount and what they consider a small monthly amount may not be the same!
As others have said Tax Credits are always calculated in a full year basis. The problem of overpayments has been an issue ever since they were introduced.
If you disagree with the figure that have used for your income you can certainly challenge it. Provide your own record of income and/ or ask them what details they have. Remember that Tax Credits are based on gross income, not net income.Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
As has been said, it's annual income.
It varies, to some degree in that it can look at "what you're earning right now, or not" .... but at the end of the Tax Year there's a check to see how much you earnt over the year.... and if you earnt so much in that year you'd have not qualified for it then they want it back.
If they did it "per week", say ... then a lot of "cheats" would find a way to be paid £1/week all through the year, except the last week when they earnt £100k.... because that's how some people's minds work.0 -
I see.
So a person qualifies for wtc, partner gets employment few months later and suddenly that wtc has to be repaid as if it was claimed illegally ... what a system.
Shame about the big overpayment due to being a couple. Almost enough to make one wish one was less honest about personal life. Gods but tax credits are awful, glad to see the end of it.
@darksparkle
It is when they don't have the complete income for the year (due to contracted employment ending before april) so they math it up and decide what you're annual income is likely to be.
So I sent them copies of our p45s pointing out the wrong figure, but they say it is ''annualised'' so it's ok (even though it is wrong).0 -
I see.
So a person qualifies for wtc, partner gets employment few months later and suddenly that wtc has to be repaid as if it was claimed illegally ... what a system.
Shame about the big overpayment due to being a couple. Almost enough to make one wish one was less honest about personal life. Gods but tax credits are awful, glad to see the end of it.
@darksparkle
It is when they don't have the complete income for the year (due to contracted employment ending before april) so they math it up and decide what you're annual income is likely to be.
So I sent them copies of our p45s pointing out the wrong figure, but they say it is ''annualised'' so it's ok (even though it is wrong).
No one is saying what you claimed was illegal. Claiming to be single when you are not would be however.
Honestly never heard of the annualised income you refer to in the 12 years I've dealt with tax credits and would be appealing that decision.0 -
PasturesNew wrote: »If they did it "per week", say ... then a lot of "cheats" would find a way to be paid £1/week all through the year, except the last week when they earnt £100k.... because that's how some people's minds work.
I do not know why Tax Credits are done like this but I do not think that is the reason. All other benefits are done on a weekly or (in the case of UC) a monthly basis. I think it is primarily because Tax Credits are run by HMRC and other benefits by DWP and Tax is of course working out on an annual basis. The problem of overpayments was identified as a significant issue with Tax Credits from early on and I think the £2,500 tolerance for changes in income was introduced to help reduce the number of people caught out.Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
I do not know why Tax Credits are done like this but I do not think that is the reason. All other benefits are done on a weekly or (in the case of UC) a monthly basis. I think it is primarily because Tax Credits are run by HMRC and other benefits by DWP and Tax is of course working out on an annual basis. The problem of overpayments was identified as a significant issue with Tax Credits from early on and I think the £2,500 tolerance for changes in income was introduced to help reduce the number of people caught out.
It is one possible reason, it does happen and that's why company directors NI is worked out annually rather than on each pay period to stop them avoiding NI by taking a lump sum each year.
Another reason would be that RTI is fairly recent, until that came in HMRC would only know the income on an annual basis. For the self employed it would still only be known on an annual basis.0
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