Tax credit thresholds, bonuses and awards

[Charlene1]

Typed this question before but can't find it now, it's not turned up on this section , so apologies if it ends up on a completely unrelated thread. Can anyone answer these questions?

1. Does anyone know the tax credit thresholds for this year? At the budget they said that "you don't have to inform them now of changes in income of less than £25k". Is this right? Or does it mean if your total yearly household income will go/goes over £25k in total you have to tell them? I read it as I could now go out, earn about £15k and still keep my tax credits that I get now. Can't see them allowing that.

1. What are the thresholds for only getting the basic £545 etc. and free prescriptions etc? Thought that now everyone gets the basic rate after a cut off threshold of £23k or £25k (can't remember which it said).

1. DP got small bonus last tax yr, so award for this yr was initially based on his basic salary for last yr. The new rate kicks in tomorrow, and will last until they review and finalise last yr's claim. When they finalise last years, they will probably say we've had too much credit paid because of this bonus. I thought changes of less than £2500 up or down were allowed, but apparently not for last tax yr.

DP has also got a v. small pay rise for this tax yr, so estimated income for this yr is higher than last yr, although this yrs bonus is not guaranteed, his boss can refuse to pay it at any time this tax yr. So we have to tell them about: extra bonus, new pay rate and possible bonus. This is way under a £25k income change. I won't know how much he got for last year until his p60 comes, so I can't tell them yet. I don't want to ring them and ask as they confuse me and I don't want to mess the claim up until I know the figures.

1. Will they base this years award on last years income, or assess it on expected income for this year. Or go under the new rules as mentioned in the budget ?

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I am in the same boat mate we are despaerately waiting on dh p60 to see what our rewards will be as last year they actually paid our mortgage but I can't see that happening this time.

I think 60k is the cutff for the lowest rate.
But if you had 64 kids you'd get something :)

I find the whole system so confusing.

I mean so many things change throughout the year you advise taxcredits and you still get hit with an overpayment.

In all honesty I too am dreading this years award, but hoping I could be pleasantly surprised

P60 should arrive soon I imagine

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I'm fairly sure that we get less than the £545. It's about £22/month.

Hi,
We have just spoken 10 mins ago to the tax credit people as we informed them three weeks ago that our income had changed. We are in this position, Harry is now receiving state pension(makes me feel very old), so with his two other pensions we have a total annual income of just under £24000.As you know we have three 8yr olds. They have just told us quite plainly that the threshold changed dramatically in the budget and that we can earn another £25000 without it affecting what we currently get. So today I have just rec`d an extra £101 then as from the 28th I still receive an extra £50 a month despite our increase in income! Tempted not to spend a penny for a couple of months just incase! Good luck!

triplets, thanks for that! Just have to wait and see what we get I suppose. Obviously they're keeping quiet about this as it sounds like most people willl get more money this year - am I right?

triplets - you'd be very wisr to not get excited - i didn't know of these changes, but when dps income changed a few years ago, they bumped up tc's even tho it was about £15K increase from incapaciuty to wages. I kept checking as they were paying me LOTS, they insisted it was right. They then informed me i'd been overpaid be £5K, and i've received no tc's for 3yrs cos of their cock up.

In answer to number 3 on your original post, when they finalise last year's claim they will apply the £2500 disregard to your DP's pay. They will base this year's claim on the final pay from last year unless yours is going to be assessed on a current year basis because you've had a change.

I had problems last year because I knew our money had gone up and rang early in April to tell them the new figures. They then applied the £2500 disregard to the new figures, without telling me that's what they'd done. When they finalised the previous year they recalculated and said I owed them money so we got nothing the rest of the year.

The new disregard of £25000 should stop that, but won't affect last year's claim. AFAIK they will still base this year on last year and the higher disregard will kick in if there are changes this year. I also understood that if you were being assessed on a current year basis rather than on last years there is NO disregard at all (but I could be wrong).

(Perhaps you shouldn't spend it just yet?)

Hi all,
Just been looking it up and found a useful site, look at
www.jones-harris.co.uk/newsletters/2006newsletter_march2006_budget.htm

still not spending mine until its confirmed in writing!

Me again, it should not be underlined, don`t know why it came out like that. It should be www.jones-harris.co.uk/newsletters/2006
newsletter underscore march2006 underscore budget.htm
oh that looks very confusing!

Found out the cut off for WTC is £14155 this year - suppose that's prescriptions/school meals etc as well. £545 pa only I think is if you get over £50k in income - someone correct me if that's wrong please!! So got one bit sorted of my query sorted, just unsure about the income changes now.
Tallulah, is it a change of "your household income goes over £25k in total", or "your income can change by an amount of up to £25k before telling them" - e.g. so if you're now on 20k, you can earn up to 45k before it changes???
Why does it have to be so flipping complicated??

I think you are still supposed to tell them if your income changes in the year but as long as it doesn't go up by more than £25000 in the year, your entitlement won't be affected. (but it WILL for next year, which point everyone seems to have missed!)

The limits depend on the number of hours you work, how many children you have, how old they are and how much you earn, which is why there isn't a "formula" so you can work it out yourself (well there is but it takes a whole day's training course to get your head around how to manually work it out).

With 4 children at home we were getting £36 a week (one is classed as severely disabled because he gets the higher care component of DLA- although in normal speak I would class him as mildly disabled) but with one at uni and a slight pay rise we are reduced to the £545 and we certainly aren't anywhere near £50K yet. Not even £40 :(

£40K that is, not £40

Hi,
Tallulah I am getting even more confused! You obviously know your stuff so can you explain to me how it will affect us next year please? Will we then get less?

Tallulah - have you told them you get disability for one of your children? You should be getting an extra bit (disability component) which is noted on your award.

Dear All
I have found the following web-site very useful -as recommended by somebody else on MN. The "how do tax credits work page" is obviously helpful, but also fill in your details and it should tell you how much you are entitled to. \link{http://www.entitledto.co.uk/howtcswork.asp?

I went on "entitled to" and it kept giving different results on things, even when putting in the same figures. Well confused! It kept insisting our council tax is higher than I input, our current tax credits were different etc. Have just got tax credit renewal pack, but can't fill it in until P60 comes - which is not going to be until June apparently.