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Tax credit application - based on last years maternity

(35 Posts)
Treeclot Wed 17-Aug-16 16:58:40

I'm applying for tax credits for first time. The form asks me for income details 2015/16. I was on maternity leave so that year looks low. This year will be more but the form doesn't ask for that info anywhere.

Won't I be overpaid credits and end up owing them?

WheresLarry Wed 17-Aug-16 22:41:29

Once your award has been made based on the 2015/16 call the tax credit office and give an estimated income for this year, your award will then be recalculated.

Treeclot Fri 19-Aug-16 17:22:50

Thank you!

Kangaroo500 Sat 18-Mar-17 17:22:30

This is a long shot but I am wondering if the original poster would mind telling me what the outcome of this was as I'm in exactly the same boat and worried about making a claim based on last year (maternity allowance) as the figures will look low compared to this years income. Did you get some kind of average payment based on both years' income or so they just work out eligibility based on the forecasted year?

SaintEyning Sat 18-Mar-17 17:27:23

Exact same happened to me 5 years ago - I told them my real income (30000 difference from maternity income...) and still the made £12k in overpayments as they could not be bothered to get the letter I sent (that they acknowledged) out of document storage to prove I had advised them of the massive leap in salary. I was having the money paid into my ISA so I didn't realise until the end of the year. I did ask three times if they were certain that was the correct amount. So so so so utterly frustrating as they would not accept it was their own fault. So maybe can you declare this year's income rather than tell the truth and avoid the arseache of them claiming back their overpayment? Fucking stupidest system ever, IMHO.

Kangaroo500 Sat 18-Mar-17 18:30:45

So I assume you had to repay it ultimately? I did consider just declaring this years income and not mention the forecasted change of income but presumably they will still catch up with me eventually and then I'm left with a big debt?? How do they make you repay it?

Babyroobs Sat 18-Mar-17 19:48:46

They can take back a certain percentage of the overpayment if you are still getting some tax credits. However if your new income means you are no longer eligible for any tax credits I think they tend to demand all the payment back ( well they did with us some years ago). However I think you can still ring and negotiate to pay it back on a monthly basis. I thin k we owed £900 when we were no longer eligible and paid it back at £25 a month over 3 years.

SaintEyning Sat 18-Mar-17 19:56:51

I just paid it straight back as it was sitting in my isa as I was only eligible for TCs for that one year when I only worked a few months. They did offer me an interest free repayment plan. Or yes, they take it out of your next year's TCs. Still, is a complete and utter shambles of a setup.

Kangaroo500 Sat 18-Mar-17 20:00:00

Oh I don't want to end up having to repay anything! What confuses me is this...there is no correct time to have claimed for my year of low income (16/17) because if I had claimed at the start of the tax year then they would have judged me based on 15/16 which was a high income year so I would not have qualified. And if I claim now then I will qualify based on 16/17 but they will expect me to declare the forthcoming years' increase in income and as such I won't be eligible again. So that year of entitlement just gets lost? Such a confusing system!

TheOriginalAngel Sat 18-Mar-17 20:06:49

I am paying back £7000 from 6 years ago. They made a mistake, I queried it, kept the money in a savings account for 4 years, figured they would not ask for it back after such a long time so spent it when moving house. The cunts asked for it back.

Always give the lowest figure.

TheOriginalAngel Sat 18-Mar-17 20:08:11

Yep. I needed the money when on Mat Leave and was entitled to nothing. Such an unfair system.

Babyroobs Sat 18-Mar-17 20:23:52

They can demand it back a good few years later, so yes as people say always overestimate your income then at least if you have been underpaid they will give you a lump sum at the end of the tax year. Far better than a repayment letter.

juni Sat 18-Mar-17 20:49:02

Oh man, so I have been on mat leave this last financial year (April to April) - my normal salary tips us just over the threshold but I was hoping to claim this year based on last years mat leave salary - does this mean I can't? I was told 3 or 4 conflicting bits of advice when I contacted them last Spring - followed one of the them and ended up with nothing, one of the others said I should claim this April as I've outlined above but was this wrong? I could cry - I was relying on this to help us with nursery fees....sad

Babyroobs Sat 18-Mar-17 21:05:24

I'm not really sure it's worth applying after the year of low earnings as if you are going back to work in April you will be overpaid surely? You should have been applying last April based on your estimated earnings for 2016-17 being under the threshold?

umberellaonesie Sat 18-Mar-17 21:11:22

If your current year income is going to 2500 higher or less than last year's they will recalculate during the tax credit period.
Phoning them is there's way to tell them as thedon't look at letters you send even signed for letters.
So phone them up the day your mat leave starts and tell them 'my circumstances have changed my income is now'
Do exact same when you return to work after matleave

Kangaroo500 Sat 18-Mar-17 21:15:26

Juni I was under the same impression-that you have to wait until your earnings have been under the threshold for a year before claiming but it seems as though that is not the case and we should have in fact claimed at the start of this financial year and asked them to calculate based on the projected income for 16/17. I could also cry! This information should be made more clear. It's terrible. I've potentially lost out on thousands of pounds. I cannot believe there is no reclaim or backdate option!

Babyroobs Sat 18-Mar-17 21:21:41

Yes I think you should apply at the start of your mat leave. then when they issue you with a NIL award based on your earnings in the previous tax year, you then ring up and tell them your circumstances have changed and you estimate your earnings to be X amount for the next tax year. That way you should start getting some payments. If for example you have been on mat leave for the tax year 2016-17, but now going back to work for tax year 2017-18, if you apply for tax credits based on your lower earnings for 2016-17 but you then earn more for 2017-18 you will be overpaid and have to pay it back.
I'm really not sure if there is a retrospective way to apply for last year- you would need to ring HMRC and ask.

Babyroobs Sat 18-Mar-17 21:24:06

Sorry crossed posts with umbrella,.

Kangaroo500 Sat 18-Mar-17 21:49:29

Thanks Babyroobs. I will call them on Monday but I'm fairly sure from the information I've gathered that I won't be able to claim for 16/17. Its very deceiving how they ask for last years earning but in fact eligibility is dependant upon the current year's situation. I'm going to bed very upset with myself about this! I've struggled for 9 months when we could have been claiming!

juni Sun 19-Mar-17 03:25:37

I'm furious, I should have recorded my phone conversations where I was given completely the wrong information. The forms make it impossible to put in a claim that will actually get you anything if you have low earnings for just one year - it's obviously done on purpose the fuckers.
Kangaroo have you seen the tax free childcare account they're rolling out? I wasn't going to use this as you can't do it as well as claiming tax credits but as that seems to have gone up the swanney it looks like that's my only option... There's a calculator here - that tells you which option is best for you.

Kangaroo500 Sun 19-Mar-17 06:47:16

Thanks Juni yes I heard about the new scheme but like you I was hoping to get the TC so its a small consolation really! I'm still going to call Monday and just make sure I'm not eligible for any TCs first as my earnings are still notgoing to be as high as they previously were so I might be entitled to a bit at least.

Babyroobs Sun 19-Mar-17 09:45:22

I would definitely ring HMRC tomorrow as we still have a few weeks of the 2016-17 tax year left so there may still be time to put a claim in.

juni Sun 19-Mar-17 10:05:12

Yes I was thinking that babyroobs - you get a couple of months backdated I think, thanks.

juni Tue 21-Mar-17 16:48:59

Kangaroo did you have any luck? The guy I spoke to adjusted my income for this year and said I'd get the whole years worth of payments- I know that's not right so while I wait I think I may try the online chat so I get a record of what I get told!

Babyroobs Tue 21-Mar-17 16:55:13

Juni- If you've been on a reduced income for the whole of the tax year then yes you should get any tax credits you are owed for the whole year. It's no different to if you had applied as the start of the year, you just would have got it in monthly payments but now you should get it as a lump sum.

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