Tax credits - they want to give me £1000/month.....??!

[stirlingstar]

I was awarded minimal tax credits last year, as we were close ish to the income limit. We're self employed and expect a significant income drop this year (credit crunch & all that). So have just received my assessment letter, and they want to pay me nearly £1000 month.

This would be fantastic. But as this is (a) a lot of money and (b) more than I even paid in tax last year, I can't bring myself to believe it. I certainly don't want a massive pay-us-back bill at the end of the year.

Is there any where I can check the calculation?
Is it feasible that I'm actually entitled to £1k/month??

(I have three degrees and I can't understand the system...)

I understand it with working tax credits if you lose your job but child tax credit replaces income support for children if out of work (as we have been told yesterday)
Before tax credits many years ago when Dh had a spell of no work for 2 months we had income support of over £150 a week for just 3 children and then Jsa on top

Doesn't make much sense to me but hopefull dh will be sorted soon.

yes claiming jsa but can't claim i/s so its £100 a week for the 2 of us but ctc has to cover the 5 kids

Think "rubbish" sounds like an understatement there...

On those figures, could almost imagine a recession works in government's favour as increased unemployment reduces their tax credits payout so much.

lockets no that's not how it works,

when I was a SAHM and XH's income was £25K our tax credits were approx £70 p/m (well every 4 weeks) so approx £2K per year.

as I say mags doesn't make much sence to me either.

It really does, we have been working out different scenarios for when dh gets another job and we would be better off with him working 16hrs and earning less than £15,000ish than if he worked full time and earned £25,000

lockets - I still don't really believe it, though do now believe it could be a really significant amount of money to us (expected something in the region of child benefit, but maybe should actually expect £500 a month). If someone on £11k is getting roughly same award as us, doesn't seem that we've been assessed correctly. And can't be right that system would 'pay' your DH to stay at home a couple of days a week.

Much of our income comes from company dividend (from our own company) rather then 'salary', so suspect something may have gone wrong in calc there.

But will certainly report back on what the judgement is.

lockets, 4 weekly that would be £52 which tbh seems to be quite low for 4 children, (next door has £40 with 2 children on the same household income) have you questioned it?

stirling, bear in mind althou i'm only on 11K p.a, that is part time hours (27) includes childcare for DS for the 27 hours, and i'm a lone parent, which apparently means more.

if you're unsure ask them for a full breakdown on how it's worked out.

sorry £56, still low.

I think a poster has suggested entitledto.com(very good for checking all your benefits) I'd recommend it too. Also HMRC website has a tax credits calulator which will both give you a fairly good idea of what you should be receiving.

Sorry to hijack but tax credits baffle me. DH was made redundant in November, my income is £32k pa, although I am on Maternity leave currently (will go onto statuatory Mat Pay from mid oct). If DH hasn't got a job by January when I return to work, he will be SAHD to DD (who will be starting school) and DS, (who will be 7 months). Will we be eligable for tax credits if DH isn't working or looking for work?
Should I be claiming now, as DH isn't getting any income support due to my salary?

I just don't understand what the criterea are.

yes I would do as your income is under £50K (the threshold I believe) you will get somehting, not sure what but something, alos you'll get the 'baby' element for under 1, coupled with the first £100 per week (as was) of maternity pay being disallowed (althou this may have increased since I was on maternity leave) being disallowed from your income, you will have a lower income. if that makes sence.

also they'll back date it by 3 months. it does take about 8 weeks I believe to sort out a new claim.

I know a lot of people who 'give' the TC/CB to the SAHP to use for activities etc with the children. mine was for activities and food.

you should be getting some ctc now if the total income is below 50k. It doesn't matter who works, they go on household income.

Thanks - I just have to get my sleep deprived brain round the forms now then

Magnolia this works out really unfair to you, sorry to hear about your dhs unemployment.

The main bulk of tax credits usually work out to be the childcare element. Childcare costs are usually so high that the government "subsidise" families with young children in this way so they can pay childcare costs and go out and work. If one of the couple is a sahm, you dont need childcare, so the childcare element of tax credits is dropped. Equally, if one of the couple is unemployed, the couple might not need childcare.

In our circumstances, we paid £850 per month in childcare costs (nursery fees), and that is pretty much what we got in tax credits, the main bulk was the childcare element, as I had to give details of nursery for our two children.

When the kids reach school age, you can claim for after school club, but that is realitically just £50 per month per child, as opposed nearly £1k!

Magnolia, you should have a look at entitledto.com as you might find that you qualify for more support now that your dh is out of work.

DH works 32 hours per week, and £14500, & we get £170 weekly for 3 children (1 under 1).

we've just put our new claim in.

I was on IS all of last tax year.

DH earned nearly 20k, but was on JSA for the last 3 months of it.

New claim apparently we're getting £572 every 4 weeks.............for 3 children. That's CTC as obviously no WTC as neither of us are working.

I was expecting less because he worked last year - but I've rung them (twice) and 2 different people - and the letter says the same thing.

I think they just pluck random figures out the air

FAQ, that sounds right.

You get:

£545 for being in a family
£545 for having a baby under 1
£2085 for each child.

Total £7345, so 13 payments of £565.

www.hmrc.gov.uk/RATES/taxcredits.htm

To anyone who wants to check their entitlement manually, do this:

If you look on www.hmrc.gov.uk/RATES/taxcredits.htm you will see a list of allowances.

1.Add up all that apply to your circumstances.

1. Deduct £6420 from your annual income.

1. Work out 39% of figure 2.

1. Deduct Figure 3 from Figure 1.

Figure 4 is your total tax credit award fro the year.

1. Divide figure 4 by 52 to get your weekly Tax Credits.

OP, I am surprised you get quite that much. DH earns £14500, and with 3 children, one 'severely disabled' we get about £1000 per month.

Or you could just go to entitledto.com

I used to understand maths before I had a baby!

it does sound high. i would phone to check.