Tax Credits again, sorry. Childcare element question.

[ValiumQueen]

Hi there, today I have been told that as my husband and I earn £30000 between us, we will not have any help towards our childcare. We have 3 children, both work full time, and our childcare costs are about £1400 a month. I thought we would have help of 70% up to £210 per week. And they have also said they overpaid us by £4000 last year for childcare even though we earned only £400 more than the year before.

I have put my figures through the calculator and it says we should get the full £210 per week. I have been almost hysterical today after hearing this, as it seems either my husband or I will need to give up work to look after our two youngest who are in full time childcare of today ironically (following mat leave) if we do not have the full help.

Sorry that is garbled. My head is up my arse

£30000 seems a lot to be earning to receive the full entitlement- are you sure that was correct?

What I mean is. At you sure the tax credit renewal and the info you put into the calculator are both correct and the same?

Sorry, it said we were entitled to £120 pw. As I said my head is up my arse. I still thought the 70% help was up to much higher wages. But they are still saying we are entitled to nothing. We still get Child Tax Credits as we have three children.

And before anyone says we should have thought about this before having no.3, he was not planned but is very much loved.

(I'm a childminder) and I know I only my single parent client is entitled to TC childcare help, the others even though in not great jobs aren't and and so use childcare vouchers to help reduce costs.

Are these an option from either or both your employers?

Thank you Narky, yes, I had childcare vouchers for 5 years as DH was studying so we could not claim tax credits. We waited to have no.2 so we only had one in childcare at a time. I cannot understand how when I earned more but paid less we were helped more. I am guessing it is all these subtle changes being brought in.

I believe you can now use vouchers and claim tax credits. I thought that was not allowed before.

You can use vouchers and claim tax credits on the difference. You can't use vouchers and claim tax credits on the whole lot

That makes sense Noisy.

Sorry had to put dinner on. Agree with what Noisy said.

VQ CAn you PM me details of your income breaking it down in to your income (and mat pay) for this year and last year, plus DP's wage and paternity pay (if he got it). Basically, what is on your p45 for 2012/13 and 2011/12?

I will try it through the calcs I use and see what it comes up with if you like?

Also childcare costs for 2011/12, 2012/13 and for the current year.

Are you expecting your income to rise or fall this year and by how much?

I have already done all that Detective, as has DH. I am hoping the calculator is right and they have just made a mistake. They do it a lot.

Anyway my wee boy is spiking a temp so I will not be here for a while.....

Have you double checked your award notice to make sure that every single detail is right?

This is the calculator I use VQ.

taxcredits.hmrc.gov.uk/Qualify/DIQHousehold.aspx

It will give you a yearly amount at the end - but just for the remainder of the financial year, so you need to work out how many weeks are left and divide the amount by that.

Hope J is okay. :)

Okay, so I have put 3 children, £30000 in to the above calculator, with CC costs of £335 a week.

I haven't deducted £100 a week off this (for maternity pay).

It gives £9535 for the remaining 34 I think it's 34 anyway) weeks of the year. Which is around £280 a week.

I can't answer on the previous year.

Except to say they are fuckwits.

You might need specialist advice if they continue to be fuckwits.

www.hmrc.gov.uk/taxcredits/people-advise-others/entitlement-tables/work-and-child/work-pay-childcare.htm#3

According to this page, hmrc, it is £14000 max we can claim with £300pw childcare fees.

Thank you Detective. That is roughly what we came up with.

ValiumQueen, I have a good accountant who is used to dealing with Tax Credits and his fees are very reasonable. Message me if you need details.

They're being stupid. We earn a similar amount between us and get help wuth childcare. I hope you can get it sorted.

Thank you x hopefully I will not need an accountant but I appreciate the offer and may well message you.

The stress of this is unbelievable. The system is so confusing.

Tax Credits are calculated in stages. The three stages are:

Child Tax Credits
Working Tax Credits
Child Care Tax Credits

Working out each element:

Child Tax Credits:

1 x Family element: £545
3 x Child element: (3x2720) £8160
Total: £8705

Working Tax Credits:

1 x Basic element: £1920
1 x Couples element: £1970
1 x 30 hr element: £790
Total: £4680

Child Care Tax Credits:

Child care costs: £323 per week.
£23 disregarded as over threshold.

£300 x 52 weeks =£15600
70%=10920
Total: £10920

Any deductions are first taken from the Child Care Tax credits, then Working Tax Credits, then Child Tax Credits.

You are allowed £6420 in earnings, deduction free.

£30,000 - £6420 =£23580

The remaining £23580 is reduced by 41p in every pound, from your tax credits.

£23580 x 0.41 = £9667.80

So, taking firstly your Child care Tax Credits:

£10920-£9667.80= £1252.20

This means that your total Tax Credits will be:

Child care: £1252.20 per year (£104.35 per month/£24.08 per week)
Working Tax Credits: £4680 (£390 per month/£90 per week)
Child Tax Credits: £8705 (£725.42 per month/£167.40 per week)

Total: £14637.20 per year/£1219.77 per month/£281.48 per week.

The advisor was right, I think. If you were overpaid last year, that overpayment will first come from the Child Care Tax Credits. As they say you were overpaid by £4000, then all of the Child Care Tax Credits and the first £2800 of the Working Tax Credits will be swallowed up by that.

That isn't to say that you definitely were overpaid - you need to check that out. However, on the face of it, if that is correct, then the advisor was correct

But overpayments aren't clawed back in one year where there is an ongoing award. IIRC they're only supposed to reduce the award by 25% a year to repay an overpayment.