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 Am I building up an overpayment?
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orangeblossom
Rank; Hector Tax Inspector


3 Posts

Posted - 23/11/2010 :  09:07:49  Show Profile Send orangeblossom a Private Message
We had a smaller income last year than this, as my partner has a new job. Our combined income from last year was just under 15,000 (9,500 self-employed and 5000 IB) and this year (tax year) will be around 35,000 (30,000 new job and 5,000 IB) I'm a bit worried as we are getting quite high amounts compared before at present (about 400 a month) as well as childcare covered as I am claiming incapacity benefit, at a rate of about 80% I think. I have told them on the phone after he got the new job and they know about it, he has however been doing a little self employed work and is not sure of how much it will be yet. The terms are 6 months for payment of his contracts, so I'm not even sure if it will be included in this tax year.

Are childcare amounts included in a repayment? We qualify for childcare due to my incapacity benefit, and am just using a small amount at present as am worried about this. It seems we only qualify for the 80% childcare support for the next 5 months, till April? I still could use it a little more for those months though, it would be helpful!

I know our payments are predicted to go down a lot after next April and that's ok, I'm prepared for that and it shouldn't be a problem, just as long as isn't a big unexpected 'payback'. many thanks for any advice.

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samthe
Mod



341 Posts

Posted - 23/11/2010 :  17:22:39  Show Profile Send samthe a Private Message
For this tax year, you can have an increase in joint gross income of up to 25000 (i.e. over your 09-10 income) without it affecting your tax credits. Your figures show an increase of about 20000 so you should be OK, unless the self-employed income adds a fair bit on.

You need to be careful to make sure TCO know in March 2011 what your latest estimate is for your joint 10-11 income, & that they use that to pay you from 6 Apl. 2011 on. Otherwise you will be overpaid from 6 Apl. until the annual declaration is done next spring/summer.
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orangeblossom
Rank; Hector Tax Inspector



3 Posts

Posted - 24/11/2010 :  11:18:04  Show Profile Send orangeblossom a Private Message
Hi thanks Samthe- so I calculate that unless the self-employed income adds up to more than 5000 we should be okay? They are aware of the increase this year, and predict our payments to go down to something like 50 a month next year, so I'll just be prepared for that and try to keep a bit aside or something just in case.

My main concern is the childcare, do you know if they 'reclaim' the childcare part in an overpayment? Thanks
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orangeblossom
Rank; Hector Tax Inspector



3 Posts

Posted - 24/11/2010 :  11:48:59  Show Profile Send orangeblossom a Private Message
Hi again Samthe- sorry to bother again,

so if we were to have an overpayment it would happen from next April? and not before?
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samthe
Mod



341 Posts

Posted - 24/11/2010 :  15:11:51  Show Profile Send samthe a Private Message
If there is an overpayment they don't differentiate between the different elements of your award, so they don't ignore the childcare element. They just look at the total amount you should have been paid, & if you have been paid more then that is the overpaid amount.

You are right that there will be no overpayment for this tax year provided joint gross income does not go up by more than 25K above the 09-10 figure. (This assumes, of course, that there are no other factors which could cause an overpayment.)

I suggest you re-confirm with them in March that they have got both your estimated 10-11 incomes correctly recorded & that they will pay you on the basis of them from 6 Apl. 2011. If that happens, there should not be an overpayment from Apl. either.
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