to just not understand tax credits

[PuraVida]

working tax credits that is.

so, i earn £23k, DP earns £21k. 1 DC, no savings, no assets, rented flat, 1 15 year old car, big student debt - still. We get £43 a month.

Friend 1 - Given up work to be SAHM, husband earns around £65k, £500k house, 2 top of the range BMW's, 3 or 4 holidays a year, plus regular flights to see family members across the globe, 1 DC same age as mine. Has just had a £1500 rebate for last year and this year is getting c.£100pm

Friend 2 - Student, DP earns around £30k, 2 DC, 3 bed house, 2DC, just had a £3000 (!!!!) rebate

i know that they are based solely on income so the savings / house / car thing is irrelevant BUT isn't there a huge discrepancy here?....it's not that i think we should be getting more than we are, but i cannot understand why these two (and others i have seen mention tax credit amounts on here), are so wildly differing....

That's why hopefully the whole thing will be overhauled

Friend 1 - don't suppose he's a director or self employed is he?

Friend 2 - they have £30k income and 2 dc, you have £45k income and 1 dc hence the difference!

NOt sure why friend 1 would get anything...

Friend 1 simply isn't declaring their income correctly. The BMWs etc are irrelevant. Friend 2 either earns less than they are telling you or forks out a lot on childcare.

yes, the childcare credits can be up to 80% of the childcare costs. That adds up to a hell of a lot if she has a couple of dc's in nursery for a few days a week.

Friend 1 is either not being truthful to you about how much their partner earns or isn't being truthful to the tax credits people. On a family wage of £65,000 a year, they would be entitled to no tax credits.

And friend 1 is telling porkies to someone.

I know people on approx £60k and they have checked and they weren't entitled to tax credits.

Don't know about the tax credits (clearly they are a mystery) but I'd love to know how someone on £65k manages a £500,00 house.

And two BMWs and foreign holidays!

I earn a lot less than that, single mum, and have a £600,000+ house.... But I bought it back in 1990.

Is friend 1 self employed with a ltd company paying himself dividends or they are not telling the truth.

Yes I suspected that had to be the answer! Either that or they are in a hell of alot of debt and have been telling a few fibs to get what they have.

the 500k house is irrelevant. They could have moved up the property market and only have a small mortgage

Or been left money by a relative.