CTC & WTC 2011/2012

[CarGirl]

Has anyone found one of these yet?

I found the tables saying how much each element was etc but no calculator.

I mainly want to know if the £40k cut off is the top ceiling regardless of how many children you have and regardless of how much your childcare costs?????

I need to work out whether to use childcare vouchers, or whether it would be worth reducing my hours and not need childcare etc etc etc

My head hurts

The HMRC site is about the best but it isn't updated for the new rules from April 2011 yet. This site June 10 Budget states "child tax credit - families earning more than £40,000/yr won?t get child tax credit from April 2011". Which is pretty unequivocal. And if you click the link about benefits and tax credits it states again "no Child Tax Credit from April 2011 for families earning more than £40,000 per year"

Hope that helps.

Nope, not really because I already know that - there is a distinct lack of detail and information!

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It does depend on how many children you have and how much childcare you're claiming. There's more information here which I think explains the changes fairly well. The gist of it is that, if you're currently getting more than 545 a year with a child over 1 and/or help with childcare then this should continue, but you may get less than you do currently.

HTH

Thank you Daisy that is more helpful. I guess I will look at the calculator and put in the figure I think I will be earning next year and try and work out if we still get any help with our childcare costs. If we don't I guess I may as well reduce my hours at work slightly and start claiming childcare vouchers!

Don't forget that if you salary sacrifice for childcare vouchers that this reduces your income for tax credit purposes - so you don't pay tax (20%), or NI (12%), plus you don't 'lose' the 41% from your tax credits for that portion of your income. There are calculators that will tell you whether you're better off claiming childcare tax credits or salary sacrificing for childcare vouchers. Hope that makes sense!

Oh, and also bear in mind that if either you are your partner are anywhere near the 40% tax threshold that from April higher tax rate payers who are new starters to schemes will not be able to salary sacrifice as much as they can currently - might be worth signing up now if you think that it will apply to you in the future.

I think we may get something like £5 per week towards our childcare costs

If I reduce my working hours to 31 per week then life will be much more pleasant and we shouldn't need to use any holiday childcare an perhaps breakfast club (which they love) a couple of times a week to ease pressure.

If you're only getting that much, then it's almost certainly worth doing childcare vouchers (I think you should be able to use them anyway for the portion not covered by tax credits). Worth seeing what the calculators say though.

But added into the complication is that this year I've earnt about £10k less than I should next year - so the new £10k disregard comes into place, if I earn more than £10k they will reculate, if I earn less they will leave it on this years salary and I will get more CTC.

My head is about to explode!

That is interesting that I could use vouchers for 30% definately not covered by the childcare element of CTC.......

It's only the portion that's above 10k that they will add on though eg If this year you earn 15K and next year you earn 26K, next year's figures will be worked out on this year's income plus the 1K that's above the 10K disregard ie 16K. So shouldn't make that much difference.

You can't use the childcare vouchers on the 30% that's not covered - if you're only getting 5 pounds a week, then they're presumably not paying 70% of your costs, just 70% of some of them. So you can use the vouchers on the bit that they're not paying anything towards - I'm probably not explaining this very well! Might be worth talking to them about whether you can or not, I'm not especially clued up on the childcare element as we've never claimed it.

On reflection, I don't think you can combine childcare tax credits and salary sacrifice. However, if you're only getting 5 pounds then you will almost certainly be better off using salary sacrifice.

Off to use the calculator on our current year circumstances, but no idea how to work out how much it will go down by next year with the new limits.......

Can I just add I'm relatively intelligent, I once designed a spreadsheet to work how much WFTC you could get according to circumstances but I've never been able to get hold of the core detail of CTC to reproduce a calculator!

Sorry if I'm confusing you! There is an information booklet on the HMRC website which explains exactly how it is worked out - after the first year when we got overpaid, I've always worked our awards out manually to make sure we're paid the right amount, so it is possible! I'll see if I can find it.

You're not confusing me it's just complicated and I have decisions to make

OK, found it At the end of the leaflet are examples of how awards are calculated. If you look at the BBC link above, you should be able to work out how the changes will affect you.