Would expenses claimed back affect tax credits?

[TheChild]

My DH has just started a year long secondment and gets to claim expenses for fuel costs, parking and tunnel fees, this is paid on top of his wage after taxes.

We currently claim tax credits, with his wage increase I think we would still be entitled to a small amount of tax credits, but with this extra amount on top it looks like DH earns more than he does instead of being paid back expenses. When I update tax credits should I include the expenses income for his new approximate wage? I'm worried if I don't when they get confirmation of what he has been paid the expenses aren't seperated from his wage, so it looks like we are claiming when we are not entitled to it.

If we do give them his wage with the expenses included we will definitely be over the threshold for tax credits which is fine in itself as it's what we have been working towards. But I have heard that if during the tax year your income goes up so much that it means you are no longer entitled to tax credits, that not only do your tax credits stop immediately, but you have to pay back all tax credits you have receiced in the financial year. Can anyone confirm if this is correct? If it is we are going to end up owing them a hefty amount as we received the one off £500 payment and we were also receiving a lot more in tax credits for part of the year until I increased my working hours and got a payrise.

I'd be so grateful if anyone has any advice, I would contact HMRC to ask but unfortunately everytime I have spoken to someone I have ended the call with very little faith that the person I spoke to had any idea what they were saying.

I found this on the gov.uk website under the section that says what to deduct from gross income and unfortunately I have no clue what that means, does it mean we deduct the expenses because his employer is reimbursing them each month or we DO include them?

If it's repayment of expenses reimbursed for the things you say, ie the costs of doing the job for more than normal commuting to his normal office, it will be a separate line in his payslip and not included in his annual salary, so won't affect his tax credits or be counted as taxable income, it's just how they have decided to repay their business expenses.

@BarbaraofSeville

If it's repayment of expenses reimbursed for the things you say, ie the costs of doing the job for more than normal commuting to his normal office, it will be a separate line in his payslip and not included in his annual salary, so won't affect his tax credits or be counted as taxable income, it's just how they have decided to repay their business expenses.

Thanks so much! He said it should appear as a seperate line on his payslip but is still waiting for his first one to know for sure. Thanks so much for replying 😊

It means that if he didn't get reimbursed, these should be deducted from gross pay. If he did get reimbursed, he doesn't deduct them.

Sorry probably didn't answer your question. But the pp is right, reimbursement of expenses would be part of the salary.

Expenses are separate from your gross wage and not taken into account for tax credit or up purposes.