Tax Credit Query

[scottybeammeup]

Can someone please help me?

I've been claiming both CTC & WTC for the last 2.5years.

I was "investigated" last year as according to their records my husband was still living at my address (former marital home). He most definitely was not! The mortgage is still in joint names as we have young children and I do not earn enough to take the mortgage into my name only. There are no joint named bills any more and he is registered as living at another address through his work, council tax, electoral roll etc.

After a lot of time on the phone it was accepted that he wasn't living here.

I do however have a lodger who is registered here. I pay full council tax and she is on the electoral roll, has bank accounts etc registered to this address. She pays £300 a month for the room so a total of £3600 a year.

Should her living here effect my tax credit claim? I've been told by hmrc that my claim is being investigated again (although not the reason why) and I'm wracking my brains as to what I'm being investigated for! I thought under the Rent a Room Scheme I was allowed this income but am now worrying that I'm not!

Can anyone help?

I am no expert but have you declared this as income? The income will be tax free but surely it would reduce your tax credit entitlement?

I think the £3,600 she pays you would be counted as income for tax credit purposes. Have you told themyou have a lodger living at your house?

According to this rent a room income is excluded.

Not sure why you're being investigated but it may well be that if your lodger has any official record of living at your address that you've been flagged up again. What a nuisance for you.

Scotty, I have just posted with a near identical scenario, minus the lodger part! Please let me know how you get on.

Reallybad that link shows payment from a lodger is counted as income.

You don't have to declare income or interest from tax-free savings such as an Isa (either cash Isa or stocks and shares Isa) or any rent you receive through the rent-a-room scheme.

From the above link.

Every single parent in the country claiming tax credits are receiving these letters. See the 'concentrix' MN threads.

By single parent, I mean lone parent iyswim

Thank you for the advice and link.

I knew I had read somewhere that income from the Rent a Room Scheme was excluded provided it was under a certain amount, which mine is, by a long way. Although saying that, it's not been declared so I guess they don't know it's under the limit!!

I have declared a payment I received from a dividend which amounted to about £200 after the £300 was taken into consideration.

I've completed the online calculators and both declared and not declared the rental income and they come out with the same award amount so hopefully it will be ok. If not it will be a genuine mistake on my part.

Do they take this into account or fine you regardless??

Hi there just heard about this benefits cap on first 2 children, I have 2 girls and expected my 3rd in January, my eldest was due to start college in September so I was hoping to renew my child tax to support her through, however does this mean if when I have my baby I cant claim as its the 3rd child, therefore I would be unable to claim childcare and return back to my job??? So confused....

I don't think anybody knows at the moment joanne because there's been no official announcement. It's just speculation at the moment.

No one knows the details at the moment as the budget hasn't even been delivered yet! Tax credits for childcare costs are part of working tax credits rather than child tax credits anyway so may not even be affected.