HELP going mental over tax credits!!!!!! sorry very long

[boytwo]

Help me mumsnetters!!!
To summarise..
I went back to work in sept to a job i hate for quite crap money and its been a disaster in every way possible now tax credits hell!!
Basically I have not notified tax credit of the change in income (since sept) so have been being paid normal amount (106 every four weeks) stupid not to tell them straight away but i just kept thinking i'd change jobs and there was no point-various sagas re job apps etc.
Ok so I'm now about to tell them and was getting figures together and thought i'd check what i'd owe them on entitled to. Anyhow bottom line is it appears i may owe them 900! (realise this maybe smallfry to some tax credits overpayments)Main trouble is job finishes in may and so far nothing new on horizon and tbh dont really want to carry on working since too much grief with kids etc.
My question (there is one i hear you gasp) is
how does the 25k disregard work.
tax year 07/08 end less than this year and will earn less than 08/09 (at the end)in 09/10.
Which year will they use to calculate 09/10 or can I get away with overpayment??

Bumping for you.

I'm sorry but i think you need to be honest for your sake and everyone else

If you get found out it can make it really difficult for you to claim anything which after may if your are not working you'll need.

If you aren't honest and try to 'get away with the over payment' then you are in essence stealing from everyone who pays any tax - people already think those who claim for stuff are trying to swindle money from the government and you would be just confirming that!!!

Sorry if it sounds harsh but it really gets my goat

I think your excess this year is disregarded, but your tax credits for next year will be lower because they will assume you are earning the same as this year. At the end of next year they will assess whether they or you owe anything.

You need to tell them now that you are earning - think you only have 3 months to notify them!

If you received any maternity pay this financial year then the smp/ma aspect is ignored for calculations.

They will stop your payments, next year they will reduce payments (based on this years income). When your work finishes you ring them up and tell them and ask them to adjust the figures to recalculate - this may well wipe out the overpayment you still owe at that point.

You do need to tell them asap as the way your tax credits are made up includes an extra amount of money for working and this will onyl be backdated by 3 months. However, your payments this year will be based on your income for 07-08 unless you earn £25K more than in 07-08. If you do, then they will ignore the first £25K of this increase when working out your award for this year.

Next year they will base your award on what you've earnt this year (08-09) unless you expect to earn less, when you can phone them up and tell them what you expect to earn and they will adjust your payments accordingly - you don't need to wait until the end of the 09-10 year, but if you underestimate your income then you may be overpaid.

If you are entitled to child tax credit at the higher rate (ie more than £545 for a child over 1) then they are only allowed to take a maxmimum of 25% of your award back in any one year. If you get the basic family amount (£545) then they can stop your payments altogether until you've repaid the amount owing.

HTH

Thanks all, DaisyMooSteiner just to clarify -
my DH works 40 hours so we are eligible for 30 hours credit with out my wage and i'm working under 16 hours so don't think that backdate thing is relevant?? But we earned less last year and will earn less next year so what happens in 09/10 if i tell them end of 08/09 that we got 3k more in 08/09?

It shouldn't make a difference to the award for 08/09 as it's under £25K.

The 09/10 payments will be based initially on your income for 08/09 including your wages, but if you phone and tell them you expect to earn less this year they will put your payments up based on your estimated income. If that's wrong though and you earn more than you expect they will claw back any overpayment in future years.

What DaisyMooSteiner said. There is no compulsion to tell them straight away for a relatively low increase, especially if you've nothing to gain or lose from it. We're in a similar situation in that it was more this year, likely to be less next year. But we do tend to overestimate our income to ensure we don't get overpaid - then you get a little extra money at the end of the year which is quite nice.