Advertisement

loader

Talk

Advanced search

Mumsnet has not checked the qualifications of anyone posting here. Free legal advice is available from a Citizen's Advice Bureau, and the Law Society can supply a list of local solicitors.

Can someone that UNDERSTANDS the Tax credit system offer me an interpretation of this please?

(4 Posts)
SlightlyMadSpider Wed 25-Jul-07 17:04:31

I am just doing my renewal.
I have just read that they won't adjust my reward for 2007/08 even if I tell them I am earning more. I do not want to be stung with a huge overpayment as I am expecting to earn at least £10K more this year as last year I was on mat leave & went back part time. I am now working a lot more hours. I was going to insist that they take into account my new projected earnings.

BUT

I have researched this and my current conclusion is that I could earn £24999 more than 2006/07 and they still give tax credits based on my earnings in 2006/07 and not a penny more. My tax credits will only change for the 08/09 year. Is this right or will I suddently realise that I have a huge overpayment in April 2008? If anyone wants to google for an interpretation hte phrase to use is "level of disregard".

<If I am right this is a fantastic ipmprovement to the system and might actually work for us >

SlightlyMadSpider Wed 25-Jul-07 18:05:12

bump

HappyMummyOfOne Wed 25-Jul-07 18:56:53

Hope the below is of some use, as you know your income has changed as you work more hours you have to advise them.

"Before, if your income had gone up or down by more than £2,500, you had to notify the Revenue and it would adjust your tax credits accordingly. Now the change must be more than £25,000 either way, which should simplify the administration for both the Revenue and claimants.

But this disregard lasts only for one year, and you will still need to re-­register accurately for next year’s ­payments.
A Revenue spokeswoman denied that the change would help to “massage” the overpayment figures.

She added: “It is an increase in ­entitlement which benefits about 600,000 families two-thirds of whom are in the bottom 30 per cent of the income distribution.

“The tax credit income disregard lasts one year. So, for example, if in 2007/08 your income is £9,000, in 2008/09 £19,000 and 2009/10 it rises slightly to £20,000, for tax credits purposes in the first two of those years your tax credits will be based on an income of £9,000. Then in 2009/10 will it be based on £19,000.”

However, there are a number of changes in your circumstances that you are obliged to tell the Revenue about immediately, such as a change in your working hours."

SlightlyMadSpider Wed 25-Jul-07 19:46:51

Thanks,

Had already advised them of increse in pay and hours.

So your interpretation is the same as mine - unless your income increases by more than £25K the tax credits are always going to be based on the previous tax years income?

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now