Tax Credits and Maternity Leave

[LunarSea]

Does anyone know what happens if you don't usually get any tax credits, but because of going off on maternity leave (which as it happens will coincide with the start of the tax year) your income drops dramatically?

Do they still count your previous years income (which would rule you out), your current income, or your anticipated total income for the year (in our case either would rule us in, but would give a different amount)?

I phoned them and gave them an estimated income for the year. At the end of the year you have to give the actual figure and they adjust your payments accordingly.

You dont have to include maternity pay in your income.

HMRC tell you to advise them as soon as a change in income ocurs. I'd ring them and see what they say. Mind you IMO they aren't always that helpful! You will be entitled to more in the period when your income drops.

The tax credits should be based on actual income but obviously for self employed or those who change jobs this varies so they work on last years figs and then update once the tax years finished (the form you have to send back by 30 Sept each year). But as you know your income will be less they should be able to change it straight away(or as near as they get to it, ie a few months later)

they told me that they disregard the first £100 (a week) of any pay whilst on maternity leave and then count the rest in to your allowance. we have just claimed scince i have been on mat leave and only going back part time so its quite a drop for us.
but now we are also entitled to help towards child care, but just working out if its better to salary sacrifice for vouchers or get the child care tax credit award.

Re your second paragraph worleythewisp. I looked into that and I'm sure it worked out the same. But that might just have been for my circumstances so don't quote me on it.

Is that true then that you don't include maternity pay? I didn't realise that. BTW, people with experience - if you notify them towards the end of the year that your income was much less than the previous year, how long do they take to pay you the extra tax credits you should have had?

i was told last week by the tax credits people that they disregard the first £100 as its a stat. goverment benefit. but as i work for the nhs they have quite a good maternity pay scheme so i was entitled to more pay and so the tax credits took that in to account.