Tax Credit Briefing discussion

KevinG · 3 September 2009 at 10:52AM

patrich wrote: »

i was informed that a loss on my property rental had to be deducted from other income in the current year but when the relevant form & helpsheet arrived it said that the loss had to be carried forward to next year to be deducted from same source income and could not be set against other income this year. i sold one of my rental properties and informed wtc and tax office of the capital gain. wtc told me it only wanted to know how much interest i'd made on the amount while it was in my savings account and the capital gain was of no consequence to them as it's a capital gain. i now have put the money in to shares & according to wtc helpsheets it only wants to know if i get any dividends but if i sell shares i make a capital gain, some wtc staff say this is income, some wtc staff say inland revenue will say how much if any is to be declared as income. should i follow the helpsheet info or the staff of wtc that seem to be making rules up as they go along? i don't want to fall foul of the system but don't want my wtc/ftc calculated using a capital gain as income as the capital gain won't be a regular income, once the property or the shares are sold i don't have another lot to sell! answers would be greatfully received as my accountant doesn't know,ftc staff don't know so who knows?

Capital Gain is Capital Gain, not Income. No way it can count for Tax Credit purposes. Always follow the written rules rather than what staff tell you, that way you cannot go wrong.

amy_uk_2k · 3 September 2009 at 12:53PM

every time our circumstances change we let the tax credit office know. when we first started applying as a couple, i was a student. weve let them know when i started working, when hours changed and when salary went up. we then got a letter saying we had been overpaid and had to pay back £400. we rang immediatly to ask why we had to repay as we always let them know when our circumstances have changed. we asked why our payments were never reduced. they agreed we had told them the changes, but said we had to pay the money back. we dont earn a great deal of money and the money we do earn just baout covers the mortgage and bills and now this. reading this latest thread makes me wonder if we should be paying anything back?

amy

lisae03 · 3 September 2009 at 1:04PM

We recently had quite a drop in Tax Credits when we renewed on July. I rang them earlier to query something else although our claim is a joint one the advisor was shocked to find that my other half works more than 30 hrs. In short he said he was not down as working so we have not been getitng the working element of Tax Credits. His wage of 17000 was however taken into consideration. I said where else would he get that kind of money if he does not work. I assume our money will go up but will we get back dated if we have been under paid? Its so confusing the way this system works. Any Advice would be appreciated.

Dundee87 · 8 September 2009 at 11:29PM

Cantala59 wrote: »

I have brought my children up alone (now aged 13 and 16). When the youngest started primary school, I started working virtually full-time. As a result, I'm not very good at household administration sometimes - especially with all these forms - there is often just too much on my plate; too much for one person to juggle.

I've been told for several years running that I've been overpaid which I am at a loss to understand as I have always called the Tax Credits Dept to tell them of changes as they occurred (and usually been told that the change I was informing them about wouldn't affect the amount of Child Tax Credit I was getting). On each lot of correspondence, the amount they claimed I have been overpaid by is listed as well as the amount they are deducing to reclaim it from me.

This year I did some research to find out what my actual income had been (as I had given estimated income). In each case, I had over-estimated my income which had pushed the Tax Office to claim money back from me, based on my income-estimates which were higher than my actual income for those years.

When I called the Tax Office to point this out to them, I was told that this was my bad luck; that I had missed the deadlines and that therefore the 'case was closed'. So they are continuing to claim money back from me, when it is more likely they owe me!

What really infuriates me is that if I had under-estimated my income (instead of over-estimating it) I would be expected to repay all the excess payment back to them. However, there seems to be no onus on them to repay me when the reverse is true - how can this be? :mad::rolleyes:

Your comments and advice will be much appreciated.

Hi there,

To start off I would like to say that I hope my reply is not too offensive, abusive or taken as the opinion of HMRC as I am speaking from my own personal experiences.

When you are sent the Renewal Pack (known internally as the S17) you will, 99.99% of the time, receive this by the end of June. If you are employed then you must receive your P60, by law, no later than 31st May. If the company you work for does not supply you with this date then you can report them to the tax office.
If you don't have your P60 but have worked for the same company for the whole of the previous tax year, ie this year that would be 06/04/08 - 05/04/09, then you can use your March payslip (if paid monthly) or week 52 payslip (if paid weekly) as this will more than likely have your "Total taxable pay to date" or something similar which can be used to complete the S17 as this will mirror what is in the "Total For Year" section of your P60.

When you receive your S17 you are told that you must provide AT LEAST an estimate by 31st July (aka 1st Specified Date), if you are employed 99% of the time you should be able to provide an actual income figure as you should either have your P60 or the payslip mentioned above. If you do provide an estimate and tell on the form that it is an estimate you then get until 31st Jan (aka 2nd Specified Date) to provide the correct ACTUAL income figure.

If you provide an income that is over-estimated, but gave it as an actual income or try to call us after the 2nd Specified date if you did say it was an estimate, then I am sorry but this is your fault, no one elses. Most (but not all) people receive there S17 around the middle of May, you then have approx 10 weeks to complete it. If you decide to estimate your income even though you have received your P60 and get it wrong then I don't see why you think that you should be awarded the underpayment after you allowed the wrong information to be held by us for so long after the deadlines set out within the Tax Credit Regulations.

In the future before you complete your renewal, have your P60 (or payslip) to hand then you won't get the income wrong. At the end of the day we only ask you to complete the renewal once a year and all that is required to do this is your P60 and that it is, is it really that difficult?

As you will have guessed I work for the Tax Credit helpline and I am not saying that we are perfect, far from it sometimes, but at the end of the day I get a bit annoyed when people try to not take responsibility of their own mistakes and dispute overpayments even though it was clearly their fault because of giving the wrong income and not correcting it straight away. Which we will be happy to do.

So to end things:

1. If you're providing an estimated income, ALWAYS over estimate it, especially for the Current Year income. When over-estimating the Current Year income you may be slightly underpaid at the start of the next tax year but you will get this back when you provide the actual income on the S17 and if you provided the over-estimate when doing the renewal (and told us it was an estimate) then once you provide the actual income (before the 2nd Specified Date) you will get paid any underpayment you are due.

2. If you do supply an estimated income (and said it was an estimate) when completing the S17, ALWAYS call ASAP before 31st Jan to give the actual income figure or you will loose out on money you are entitled to. The quicker you tell us the actual income the quicker you will get your money.

xx

Stabilo · 26 September 2009 at 11:37PM

If an individual has not claimed childcare costs for 08/09 but declared their final income for 08/09 can they still make a claim? The individuals didn't realise they could claim for childcare costs because the working tax credit benefit was never explained to them.

LizzieS_2 · 27 September 2009 at 12:02AM

Personally I do find the declarations easy, but I know the same won't apply for others and declarations can innocently be made incorrectly.

This is one complicated system - perhaps adding a local agency set up to talk people through the forms would reduce user mistakes.

[Deleted User] · 27 September 2009 at 11:00AM

Stabilo wrote: »

If an individual has not claimed childcare costs for 08/09 but declared their final income for 08/09 can they still make a claim? The individuals didn't realise they could claim for childcare costs because the working tax credit benefit was never explained to them.

You should have read the guidance pack that came with the claim form, that's why it's provided. You can only backdate a change that would increase your entitlement for a maximum 3 months.

LizzieS wrote: »

Personally I do find the declarations easy, but I know the same won't apply for others and declarations can innocently be made incorrectly.

This is one complicated system - perhaps adding a local agency set up to talk people through the forms would reduce user mistakes.

If you are having problems with the forms it is possible to call the helpline and if still having difficulties you can make an appointment with an enquiry centre.

[Deleted User] · 27 September 2009 at 11:10AM

Cantala59 wrote: »

This year I did some research to find out what my actual income had been (as I had given estimated income). In each case, I had over-estimated my income which had pushed the Tax Office to claim money back from me, based on my income-estimates which were higher than my actual income for those years.

When I called the Tax Office to point this out to them, I was told that this was my bad luck; that I had missed the deadlines and that therefore the 'case was closed'. So they are continuing to claim money back from me, when it is more likely they owe me!

What really infuriates me is that if I had under-estimated my income (instead of over-estimating it) I would be expected to repay all the excess payment back to them. However, there seems to be no onus on them to repay me when the reverse is true - how can this be? :mad::rolleyes:

Your comments and advice will be much appreciated.

When you have declared your income you cannot change this figure after the 2nd specified date (31st January, same as self assesment) if it would increase your entitlement. The reason for this is that TCO need to finalise the previous tax year. They will only make amendments if there has been official error or if you have failed to notify them of a change which would have meant a lower entitlement.

You must provide an actual figure or an estimate by the first specified date (31st July). If you provide an estimate or if the actual figure is incorrect you need to give the correct actual figure by the 2nd specified date.

You have plenty of time between receiving your renewal (normally June at the latest) and the 2nd specified date so there is usally no good reason for it being late.

If you over-estimate your income and your award is reduced because of it, you will receive any under-payment you are owed when you have completed your renewal. When you estimate your income for the current year and this figure is higher than the previous year's income you will find that your award has not reduced as it is still based on the previous year's figure as there is an income disregard of £25k.

Stabilo · 27 September 2009 at 11:19AM

Subsoniccoyote

On which page of the guidance notice is the 3 months backdating rule mentioned?

Surely the July deadline declaration relates to the whole of the previous tax year which covers the period 16 to 4 months ago i.e. automatically outside the 3 month backdating rule.

So what is the purpose of the declaration if it falls outside the backdating limit?

If income can be declared up to Jan 31st following the tax year why not 'expenditure'?

[Deleted User] · 27 September 2009 at 11:47AM

Subsoniccoyote

On which page of the guidance notice is the 3 months backdating rule mentioned?

The 3 month rule is not on the new guidance pack as it has been simplified due to people complaining there was too much information to digest/understand (not sure why people moaned there was too much but they did). However your award notice and renewal pack should tell you to notify TCO of any changes as soon as they happen. You are normally advised on the documentation to notify within 1 month. The guidance (TC600 notes) does, however, state to declare your circumstances and advises you of the information required if you do pay childcare costs.

Surely the July deadline declaration relates to the whole of the previous tax year which covers the period 16 to 4 months ago i.e. automatically outside the 3 month backdating rule.

You should report changes as they happen and not wait until your renewal to make the changes. This is a common error by claimants as they do not read all of the information sent to them.

So what is the purpose of the declaration if it falls outside the backdating limit?

As explained, it is mainly to declare your income but TCO also want to make sure you have been keeping them up to date with your circumstances.

If income can be declared up to Jan 31st following the tax year why not 'expenditure'?

If you are talking about the childcare costs it because there is the 3 month backdating rule. The self assessment deadline is 31st January and is the reson why there is such a long period of time. TCO cannot expect someone who is self employed to have their actual profit figures 6 months before their deadline. [/QUOTE]

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