New Tax Credits

[PamT]

Has everyone applied for the new tax credits? They start in April and replace not only the existing WFTC and Disabled Persons Tax Credits but also the Children's Tax Credit. Currently the wage earner receives approximately £10 per week extra due to an adjustment of the tax code. This will stop in April and you will only get this payment if you apply for it. I think it will be paid to families earning anything up to about £58K. Families earning up to around £22K will also be entitled to additional money in Child Tax Credit or Working Tax Credit.

See www.inlandrevenue.gov.uk for more information. You can calculate your entitlement or apply on line.

And no, I don't work for them but I do think that everyone should get what they are entitled to. My form went in about a month ago

Thats OK then because we definitely got an acknowledgement. Thanks.

Those of you who will benefit from the new tax credit should remember that Gordon Brown increased Natonal Insurance contributions at the last budget whci are due to take effect from this April. We've worked out that one cancels out the other so we shall be something like 20p a month better off! Having said that the Child tax Credit does go straigt to the main carers bank/building society and is not taken at source from the main income earner so some carers especially SAHM with no personal income may benfit.

Please excuse the typos I'm trying to rush before another fight breaks out downstairs

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I did mine on the internet last night - down and up the stairs about 5 times to find various reference no's, bank account details etc - it told me at the end I was going to get 545 GBP, I hope it hasn't lost mine! (I did print off the reference but I don't know where I put it...)

We got notification yesterday that I would be getting £267 every four weeks - yippee!! But my circumstances have changed (hours have increased but so has childcare) so I rang them today.

Unfortunately because my salary has gone up, we aren't entitled to anything (well £10 per week which is the bare minimum). When I queried the fact that we are nowhere near the £55K threshold I was told well you earn too much but because it's not over the threshold, you'll get the £10. Gutted in North Wales! Having said that if they did overpay me, then we would have had to repay it which may have caused problems. Reading the guidance notes it does say that they will check when the P60's are issued in April 2003 so that if you did earn more they will come looking for the overpayment, but equally if you earned less then you'll be re-credited.

I have to agree that the forms were a bit of a nightmare to fill in and when I rang the Helpline I got different answers to my queries. The woman today said that if your costs go up or down by £10 then you need to contact them.

Good luck to everyone else - why wasn't this introduced years ago when I had two in nursery and was basically working for nothing??? Do you ever get the feeling, you are always going to miss out .....

I'm still waiting to hear.... they've told me I have been awarded an amount, but they can't tell me over the phone how much. Apparently it's in the post!! HURRY PLEEEEAASE!

Coxy as I understand it there are two distinct payments both on a sliding scale. One is a child credit which has the 55K threshold and so we should be entitled to a bit from that and one is a childcare credit which has a much lower threshold (20-something K??) which we will get nothing from. It seems daft really because childcare probably costs us more than everything else we spend on DS put together and I only work 3 days a week.

It can't be a very sliding scale though, if you suddenly go from £267 every 4 weeks to £40 every 4 weeks? It must slide up to a point and then be fixed - I'm not surprised Coxy's a bit miffed!

Has anyone seen any actual figures (eg in a nice readable table) for how much you get at each level?

Oh JanH you are optimistic. An easily readable table from the Inland Revenue?

Didn't realise that about the repayment Coxy, I was getting rather excited as it appeared we were going to be minting it in as the earning figures were based on 2001/2002, when both dh and I had 5 months off to have dd but the childcare figures were what I'm paying now working full time.

Ah well, might have guessed there's no such thing as a free lunch.

Bozza, whatever do you mean???

(I did mean to do a winky when I posted it...!)

Hmmm... the lady who runs ds's nursery said that they've had literally dozens of enquiries for places starting in April, exactly when this comes in, and almost all for children born during the 2001/2 tax year. Coincidence?

I sent my form off straight away last September like a good girl but apart from an acknowledgement in November I haven't heard anything yet. It seems that those who applied early have been put to the bottom of the pile and the most recent applications are being returned much more quickly. I'm now desperate to receive mine because dh and I have done a role reversal and taken a £5000 drop in income. I can't appeal until I get my notification and as we are talking about something like £125 per week I really don't want to lose out. They have been telling people that all the claims have been worked out but they are sending the letters in batches as they can only do 4000 at a time. I'm becoming increasingly irritated with the adverts telling you morning, noon and night, that the sooner you apply, the sooner you will find out what you are entitled to.

GillW I was told about a childminder who had had several children registered with her just until the childcare tax credit came through before they went back to Grandma who minded for free but the tax credit was still paid to the parents.

I applied online in November and made up my PAYE number since it wouldn't accept the one on my P whatever. Waited to here since neeeded to advise about that. Had heard nothing by Jan so rang. Was called back about 2 weeks later to say they had my form. Then about 2 days later had another call saying they needed to check if I had sent my form in!!!!!! Not very hopeful that things will go smoothly here.

janh - there are guideline figures in a table here . It gets withdrawn at a fairly steep 37p for every additional pound of gross income, according to this . By the time you've already paid tax and NI on that, you get left with all of 30p for each extra pound you earn. Yes - working parents in the UK can have an effective tax rate of 70%, while even the super-rich never pay more than 40% The IR rules do say they'll ignore increases of up to £2500 per year though, so just make sure your payrise doesn't come in at £2501, or you'll be a lot worse off than if it had been £2499!

Thanks, Gill, that's exactly what I wanted!

(Have you had a look, Bozza? It's an easily readable table but, surprise, not done by the Inland Revenue!)

It's certainly a very UNsliding scale though - seems to be step step step off. And having seen the figures no wonder people are so keen to get their kids into approved childcare provision.

PamT, I applied over the internet in September & got my award notice this Tuesday.
Those of you concerned about changes in income since 2001/02, the notice tells you what figure will make a difference to your award. It tells you the amount of income you quoted then gives you a lower figure & a higher one. If you now earn less than the lower figure or more than the upper one you have to tell them as it affects your entitlement.
As for the childminding thing, if someone signs a legal form to say they pay for childcare when they don't, & gets found out, they WILL prosecute, because it is fraud. They are setting up new departments to deal with this, so it's more likely people will get caught.

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Spoke too soon. Got a reminder through the post this morning telling me not to forget to claim!!!

I spent 30 minutes holding to get through to them this tea time and then 10 minutes giving my changed circumstances. I still haven't had my notification so was surprised that they let me do the changes but apparently they hadn't even processed my original application yet (they've had it since september!!!). They can't process this one until I get my PAYE reference so I will have to ring the recruitment agency and then spend another 30 minutes holding to give them the additional information. What a nightmare.

Don't know whether this is relevent to tax credits or child benefits but I have been told about a government hand-out being given to families where both parents are working and who have a second or subsequent child before 31st March 2003. A friend told me about and gave me a number to call which I called all day (but it was engaged) and then promptly lost. Please help. Keen to get my mits on some of the cash before the end of March as I'm pretty sure I'm eligable but am unable to find out the number/name of form. Many thanks.

Look here www.inlandrevenue.gov.uk/ctc/index.htm on the Inland revenue web site. It is the current child tax credit which is being doubled for children born in the current tax year. If all else fails ring your/dp's tax office and they should be able to implement it as I think this one is done as part of the tax code. Hurry up though, you've only got 3 weeks left.

aha! Thank you PamT for the explanation. When my accountant (not the best for credits and stuff) told inland revenue that I had a second baby in september 2002, they increased my code from 704 (or something like that) to 10 something. My employer's accountant couldn't understand why the amount was so high. Anyway it resulted in my getting a nice large tax refund that was totally unexpected. And nobody seemed to quite know why.
I tried to apply online in early december for the new tax credits, but there is some sort of glitch that rejects you if you aren't a uk citizen (you are still eligible if you are resident). So the online people told me to mail it in, which I did. I called a few days ago to find out where it had gone and they seemed to have lost it and I am waiting for a call back to tell me so. I will probably have to fill out all the forms again. Ugh.