tax credits - AGAIN!!!!

[chickenlickin]

Sorry to be a bore but . . .
HELP. Have informed them that our joint salary for 2009/2010 was £23,000 (maternity pay and DH justed started out on own business)

But. . . this year I guess that salary prob be around £30,000 (depending on DH business surviving recession)!. Before when it was this we only got £40 month now it is £260! This is a great help but am worried we will have to pay it back when we declare salaries next year.

Or. . . is it true that you don't have to worry unless your salary goes £25,000 above what your earn't the year before???? SSOOOO confussed!

You will have to pay it back

Been trawling through all the info on the tax credits website and found this

"if your circumstances and income stayed the same throughout the year which has just ended, or if your income in that year was not more than £25,000 higher than the year before that, you should have received the right amount of tax credits"

I am hoping this covers it, has anyone else had the same worry?

I only earned 800 quid more and my tax credits were reduced so dunno

Hmm. I declared earnings of £Xk one year, then £Xk+2,000 the next year and had to repay loads.

They do it gradually though, but I think you will. Sorry!

Beautiful - did you have to actually repay or did they stop or reduce your money?

They reduced the money, and (I'm pretty sure) took back some of the overpaid money by taking that oiut of the payments too.

Ring the lovely hotline people nd aay it's hypothetical!

I would declare it....it is much less painful to not get used to the extra if they take it back.

You won't have to pay it back, unless the rules are going to change this year. I did hear mutterings about reducing the "disregard" to £2500, but I don't think it's come in yet.

If your award for 2010-11 is based on your P60 figures for 2009-10, as long as your income for 2010-11 hasn't increased by more than £25000 you will be OK.

What you will have to watch is that the period between April 2011 and next year's renewal will still be paid at this higher rate. That is the time you will be overpaid. To avoid this, wait until Feb or March next year when you've got a reasonable idea of your total for the year and ring and tell them. They will then base next year's on the higher figure and you should be OK (but watch they don't apply the disregard to it, as they did to me a couple of years ago).

If this year's award isn't based on last year's pay but your estimate of this year's, then no disregard is applied and you end up overpaid.

HTH

Phone them and let them know now how much you are expecting this year, then you wont be in a position of being oaid too much. They will reduce it, but far less painful than getting to next year and having it reduced AND paying back a huge overpayment.