Personal Tax allowance

[TryingToForgeAnewLife]

Sorry to ask probably a really stupid question....

When the personal tax allowance increases, do Tax Credits decrease as a consequence?

No it just means that less of your income is subject to tax.

So my monthly job salary should increase?

Your take home pay would increase a little if you were earning over £11,500 as the tax allowance went up to £11,850.
So in March you would have had Income Tax deducted on that months income over £958.33 whereas in April you would pay Income Tax on income over £987.50
This assumes you have full personal allowance and that you are paid monthly and other assumptions.
So £5.83 more in your take home pay per month for this financial year. However there is also an increase in minimum pension contributions, so if you are in the work pension scheme that will most likely apply to you, thus your take home pay will actually be lower in April than it was in March as the pension increase is more than the £5.83 you gained.

I don't know how tax credits is affected... my guess is you tell them your gross pay amount, not the take home amount, so your gross pay would not have changed.

So it really depends on what you are earning as gross salary, are you above the personal tax allowance?

@nannynick - thankyou. You have been really helpful. I work in the NHS. Take home pay is approx £953 but l have had pension, tax, NI and car parking fees deducted already.

I was just trying to figure out why my Tax Credits have dropped when l earnt less in 2017/2018 to 2016/2017.

And even though they estimated my 2017/2018 salary to be over £14,000, when l corrected the estimate to what l got this year - my TC payments are still less then what l received up to April this year.

Sorry.... they estimated my 2018/2019 salary to be over £14,000

Your tax credits movement will depend on your 16/17 actual income, 17/18 estimated or actual once updated and 18/19 estimated.
As the £2,500 income disregard then comes into play you can receive higher tax credits on a higher income if the middle year income was a dip.

For example.
16/17: £20k
17/18: £18k
18/19: £20k

In 17/18, despite the lower income due to the income disregard you would have received TC based on the £20k.
In 18/19, your TC would increase as now based on £18k despite the higher income.

I've got this situation as my income dipped in 17/18 as I had a period off work due to bereavement.
My 17/18 tax credits were based on my estimated 17/18 income PLUS £2,500 as the income disregard. This will be updated to 17/18 actual plus £2,500 and any excess/underpayment then sorted.

My 18/19 tax credits have now gone up as they are based on my estimated 17/18 income (which will be revised to actual in due course) but no additional amount added.
If my 18/19 income is £2,500 different to 17/18 then the above adjustments start all over again.

Thankyou

It is so complicated

Once l get my P60 and renewal pack then l can give my actual salary for 17/18. Am l correct that this then "finalises" that year?