Tax Credits question.

[wannabedomesticgoddess]

Year 1 amount earned A
Year 2 amount earned B
Year 3 estimated earnings C.

Year 2s award based on amount A. But Year 3s award is based on amount C.

Is that because the estimated is more than amount B? Surely thats not right?

Yes, because otherwise you'd be paying it back the year after!

If you'd have estimated the same, it would have been based on B..but because you've said you're going to be earning more, then of course they will reduce your award?

But Year 2 earnings were half of Year 1 and there was no extra money.

So if you earn more it goes down and if you earn less it doesnt change?

If you earn less by more than £10k, then yes, they will amend it. But you have to specifically tell them that, or they just base it on the year before.

They always base on the year before's earnings. Stupid.

Maybe someone who has a degree in tax credits ;) might come along, because I've never understood it either!!

DH earns £10k, and my mat pay has stopped...so we're £500 a month down but not entitled to any more tax credits. Because they class my mat pay as earnings of £2k this tax year. Go figure that one! :)