Another Tax Credit one...

[Amanduh]

We are helping SIL apply for a mortgage (very limited at using tech and rubbish with money but that’s another matter) and today sat with her to write out an affordability spreadsheet, budget etc etc.
She put down her income as 32k - she has 2 dc (one at school) and she works pt, husband ft. They pay out 50 per week childcare for dc2.
On top of their earnings, she put down extra income as £8000 a year in tax credits. She says she gets paid this on top of her earnings.
This sounds like a lot to me? I have put their details in various calculators and received varying outcomes, but nowhere near that figure. I think perhaps she has filled something in incorrectly somewhere along the line, but she’s adamant that’s correct. Does any one have any general idea if that figure would be about right?

It's more likely she's overstated childcare costs to HMRC than giving them the incorrect salary. I could be wrong but based on my experience it's not easy to get a fake salary past HMRC.

When I made our initial application I made a stupid mistake. You have to say if you've been on mat leave and deduct £100 per week of your mat leave off of your income, which worked out for me as £3,900 but instead (because apparently I didn't read it properly) I deducted all of my smp payments which was in excess of £7k. I sent the form off and our claim was declined because HMRC could see through RTI that my income was actually something else. Obviously I called up and sorted it out but the point I'm making is that HMRC will have a record of what she earnt in the last tax year.

On another point, when we applied for our mortgage our broker looked at mortgage companies who didn't factor in childcare costs. I was shocked that there were any out there but evidently there are.

Sounds like she's quite comfortable with not telling the truth.

odd that she would overestimate childcare costs when HMRC can check at any time too though.

Well, I spoke to her in length yesterday. She’s adamant it’s what she’s entitled to, I’ve told her none of it adds up, she refuses to admit it/contact hmrc/eveb go on the tc calculator! She’s either lied or made a mistake (leaning way towards the first one) about her childcare costs or income or both.
Thing is now I feel quite angry that she’s deliberately doing it! Would you just leave it and wait for her to get caught out? Reporting her seems wrong but what she’s doing is wrong.. she has already claimed this for a year so far.
Thanks to everyone who replied.

I am on 20k and get 4-5k a year (never sure as they always seem to chuck random amounts at me every so often).

I don’t have childcare costs though.

I'd report her. She knows exactly what she's doing and it isn't fair.
Although I know that it's a difficult situation to be in.

looks like she is deliberately defrauding the system. agree, I would shop her in.

£8k is the correct amount of money for 70% of £50 childcare plus maximum ctc for two dc.
However with two dc they would not receive maximum ctc on earnings of 32k.
It may be that one or both the dc are disabled and she hasn't told you.
Not all my family know that some of my dc are autistic for example.

Could she have made the CTC claim and told them she was a single parent who worked part time on a low wage, so ended up being given the award based on that? Or accidentally missed off her DH income and not noticed?

Not all my family know that some of my dc are autistic for example

autistic doesn't equal DLA. You need to have very high care needs to qualify for DLA. As the OP knows the children, she clearly would know if the have complex additional needs.

This is a bit confusing. So do you mean she put down £32k as their joint earnings plus £9k tax credits. Perhaps she's claiming as a single parent. That sounds the most likely.

I have met several women who consider themselves single parents because they don’t live with the child’s dad.

The reasoning is a new partner is just that, a partner, and not a dad or father to any resident children.

Of course it doesn’t work like that, but some women do see themselves as “single parent plus partner” so any benefit claims regarding the children goes on their income only, as partners finances are separate and don’t count, iyswim. As in he doesn’t pay or contribute to the kids.

Is her partner the kids father? Is the mortgage in joint or single names? It’s a bit odd that it seems to be her, plus you and dh dealing with the mortgage stuff- what’s his role in it?

she still wouldn't get 8k. hmrc know your earnings. The only figure which she could have manipulated is childcare. She apparently claims much higher childcare costs than she is paying. this is benefits fraud and should be reported.

Chocolate all my dc have high functioning asd and qualify for dla. All in mainstream school, all can easily mask for a day , a weekend even a weeks holiday . They could come across as quirky, badly behaved, a bit hyper . All three schools were doubtful of them being asd when they first went on pathways.
Their needs are high enough to merit dla as any masking results in severe meltdowns in private.

"she clearly would know if the have complex additional needs."
If that statement was true , the lives of disabled dc would be so much easier.

Her children are not disabled, additional needs or SEN. She is not entitled to any DLA. Her and DH bring home, after tax, a salary of £32k. She is receiving 8.2k a year on TOP of that in tax credits. She lives with her husband, the childrens father.

She’s applying for the mortgage in joint names, myself and DH were helping her because she isn’t computer literate or very sensible so we were helping her with a spreadsheet of all incomings/outgoings and everything she would need to go ahead with the mortgage.

I’m pretty sure she’s lying to HMRC about her childcare costs. That’s the only way I can think she’s done it.

Amanduh If I were you I'd bow out at this point. From everything you have described, her having a mortgage would be disastrous.

Also, if she is lying about childcare costs she will get found out. Anyone making that kind of claim for the childcare element of tax credits will raise a red flag and get a letter asking for evidence of payments to the childcare provider or the nursery/childminder will get a phone call to confirm the hours the children are attending.

32k after tax? That’s got to be about 40k gross?

Like i said, i’m on 20k gross and get 4-5k.

Odd. Unless tax credits pay a big chunk of 1k a month childcare fees.