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kitty
Rank; Hector Tax Inspector
3 Posts |
 Posted - 24/04/2008 : 10:00:24
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Hi, I've just found this site and was hoping to get ome advice of people who are more 'in the know' about tax credits than I am.
In the financial year 2007/2008 my partner earnt £8000 after tax in wages and interest from savings and I earnt nothing as I was a full time student. We received around £92 a week in CTC and £45 a week in WTC.
On 7th April 2008, I started work (23hrs a week) and will now earn £12000 before tax and my partner will be earning £10,000 before tax (37hrs a week). We also have savings and earn around £1000 a year in interest. This gives us a total income of £23,000 for the 2008/2009 financial year - nearly 3 times what it was the previous year.
We have 2 children; one age 5 years and the other just 5 months (born 4th November). We do not use childcare for them.
My concern is that when we phoned the IR to tell them of our change in circumstances (me starting work), they informed me that my new TC award would be £101 a week in CTC and £50 a week in WTC. I asked how this was possible as our income had gone up so much so surely our award would be reduced (I'd expacted about £45 a week in CTC and didn't think we'd be getting WTC any more). They assured me that the award was always based on last year's income. I wasn't happy with this so called back only to be told exactly the same by another advisor.
As it stands, we will be getting over £7000 in TC between now and next April. I believe we should only be getting around £2000 so I'm worried they're going to ask us to pay it back. I know a solution would be to put the 'extra' aside in savings, earn interest on it then pay it back when asked....however....my partner pays his ex-wife child maintenance which is calculated by looking at his wages plus the whole tax credits amount. This means that we're going to have to pay her extra this year then possibly have to pay back the IR over £5000 next year. There's no way we'd get back the extra child maintenance money sent to the ex-wife. The CSA's exact words were 'it's just tough if that happens'.
Am I worrying over nothing? Is it likely we're being overpaid? I have read somewhere about a £25,000 disregard figure but I find it hard to believe that a couple can earn up to £25,000 extra and not have a drop in their tax credits award.
Any advice would be wonderful.
Thanks, Kitty.
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Red Rocket
Rank; Captain Gordon
United Kingdom
223 Posts |
Posted - 24/04/2008 : 19:06:57
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Hi Kitty
Sorry to hear you are having such worries. My advice would be simple, hound them until they change your wages and give you a new assesment. Send your amended details via registered delivery. For what its worth ring them, and keep ringing until you get satisfaction, log every call you make, try and get details of the person you spoke with. Visit your local tax office, they can be helpful. Don't ignore this because given the CSA complication it could become very difficult.
CSA I know nothing about, but I think if you look at site like:
http://www.fnf.org.uk/
http://www.fathers-4-justice.org/f4j/
They may have some useful info and links.
Good look, keep posting and check in regularly, others will bbe along soon to help. |
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PJD
Da Purple one
United Kingdom
269 Posts |
Posted - 27/04/2008 : 23:24:49
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hiya Kitty.
as Red Rocket says; make sure they recalculate your award using your new circumstances. i have a template letter i suggest people in your circumstances use. sorry its a JPEG rather than something you can directly edit. but it gives you an idea hopefully.
if they are currently using the wrong info, this early in the tax year, your payments can be adjusted (once they recalculate) to avoid an end of year overpayment. and don't forget tax credits is designed to 'reward work'. this maybe why your award has gone up; you are now working, as well as your partner.
but as ever; be vigilant, and make sure you get a new award notice soon. and double, no, triple check the details on it. if you have to report any changes or errors do so by phone AND letter. and keep a record of the call time and date and a copy of the letter.
you are right to be sceptical of the £25,000 disregard. it is not the safety net it sounds and only applies in limited circumstances.
 [url=http://www.fileden.com]Free file hosting from File Den![/url] |
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missfroy2
Rank; Captain Gordon
236 Posts |
Posted - 28/04/2008 : 10:26:21
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Whilst there are some circumstances in which the £25,000 disregard does not work, yours appears to be one where it does.
Your 2007-2008 income was £8000 + interest from savings (lets say £1000) so total £9000.
Your 2008/09 income is estimated by you at £23,000. You will receive tax credits from April 2008 based on your current circumstances (i.e. your working hours, children etc) but your PREVIOUS YEAR INCOME.
It works like this:
* If your current year income rises by less than £25,000 as compared to your previous year income, then your award is based on previous year income
* If your current year income rises by more than £25,000 as compared to your previous year income, then your award is based on current year income (estimated at this point) less £25,000.
* If your current year income is less than previous year, then current year income is used.
At this point we don't know what your actual income for 2008/09 will be, and so what you have done is given HMRC an estimate. However if this estimate is input into the system, it will still pay you based on £9000 previous year income based on the first rule above. This is because of the £25,000 disregard.
Where caution must be urged is:
1. As suggested keep notes of telephone calls etc and who you spoke to to report the change.
2. Whilst the £25,000 disregard will apply to your 2008/09 income compared to your 2007/08 it will not protect you when your provisional payments for 2009/10 start. These will be based on £23000 and if you had not given HMRC this information then you would risk an overpayment because they would pay your provisional payments from April 2009 based on £8000 until they had your actual 2008/09 figure.
In this instance I think the helpline have told you correctly.
MF |
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kitty
Rank; Hector Tax Inspector
3 Posts |
Posted - 28/04/2008 : 13:44:55
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Thanks so much for your help. It's all much clearer now. It does actually sound like our award is correct now I've read your explanation. Just have to make sure that when this tax year ends, they don't start over-paying for 2009/10.
Kitty |
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Alan the Geordie
Da Purple one
2787 Posts |
Posted - 28/04/2008 : 14:29:35
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Hello Kitty.
I'm pleased we were able to help.
Please, please remember that a telephone call isn't worth the paper it's written on, so if ever you do make - or receive - any telephone calls with HMRC write to them with what you believe what was said & agreed, send it by Recorded Delivery & keep a copy.
Finally, please tell as many people as you can about this site.
Thank you .
Alan
Apathy rules OK - so why do I bother? |
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missfroy2
Rank; Captain Gordon
236 Posts |
Posted - 28/04/2008 : 16:37:40
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Kitty
I forgot to add, that your award may also have increased because you are now entitled to the 30 hr element. You didn't say how many hours your partner works or worked last year, but this could also be relevant.
Basically you get the 30 hr element if one of you works 30hrs or more. You can also get it where you are part of a couple and:
1. At least one of you is responsible for a child
2. Your combined hours are 30 or more
3. At least one of you is engaged in qualifying work for 16 hrs or more.
MF |
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kitty
Rank; Hector Tax Inspector
3 Posts |
Posted - 06/05/2008 : 10:58:07
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Thanks for everyone's replies. I've spoken to the helpline again and asked for a full explanation of my award. They basically reiterated what has been posted on here - that I'm entitled to the award because our earnings have not increased by more than £25,000. Feel much happier about it all now. Think I was just paranoid I'd get a massive overpayment bill this time next year after hearing so many horror stories!
Thanks again, Kitty  |
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Alan the Geordie
Da Purple one
2787 Posts |
Posted - 06/05/2008 : 13:03:37
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>>Think I was just paranoid I'd get a massive overpayment bill this time next year after hearing so many horror stories!<<
Aye, that's very easy to understand!
Apathy rules OK - so why do I bother? |
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Ali M-W
Da Tech(y ones)
3296 Posts |
Posted - 08/05/2008 : 05:10:05
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I am going to exit the Tax Credit 'system', although with its usual attention to 'protecting the public purse', HMRC want me to take £546 they assure me will be safe to 'collect' in respect of last year's unclaimed/unpaid award, at the same time as they are demanding £700 from me with menaces. Given the twenty or more serious mistakes they have made with my claim, they could easily have given me a tax credit divorce, scrubbing the £546 and the £700, calling it quits, and 'protecting the public purse' from further administrative and dispute costs. Sorted.
However, this is all too easy for HMRC, and my offer expired at the end of April, so the £546 is now going to help me and mine with the cost of living in Nu Labour Britain, ie. disappearing into the red. They can go sing for the £700, which I have evidence was not overpaid after all, anyway. Cost-effectiveness and the justice of recovery doesn't enter into it, and HMRC 'discretion' is always conspicuous by its absence.
I, too, got sent a letter assuring me that if nothing had changed, and our family was as it has always been, and my salary hadn't risen by over £25,000 (chance would be a fine thing), then I am safe.
So maybe HMRC have got their act together at last, and this £546 isn't an accident waiting to happen. But if you are unsure, you can always get your MP to write to them on your behalf and ask for confirmation that your award is right.
I am still getting out now that I can, however. I don't want to be Brown's guinea pig any more.
Morpheus: … as long as there is a single breath in his body he'll never give up… and neither can we.
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Trying to anticipate an overpayment
