tax credit assesments 2008 - problem?

[DBY]

I earned approx £14,000 less in 2006-2007, than in 2007-2008.

We've been receiving tax credits based on our 2006-2007 income - im a little concerned - I suppose we'll have to pay back any overpayments?

[Goldlady]

I think you might DBY:p. I know you don't have to notify them if your income stays within a certain level. Are you self employed? Meaning that you really wouldn't have any definite figures at an earlier stage....

[DBY]

I think you might DBY:p. I know you don't have to notify them if your income stays within a certain level. Are you self employed? Meaning that you really wouldn't have any definite figures at an earlier stage....

 

Hi there, thanks for your respone Goldlady, no im not self employed!

I heard somewhere that if your income increases by no more than 25k then they'll not ask for a repayment???? is this true?

[soma]

Yes.

 

"If you have been overpaid, and expect your income for the current tax year to rise by more than £2,500, you must tell the HMRC. But in the 2005 pre-Budget report it was announced that this threshold would rise to £25,000 in 2006."

 

 

BBC NEWS | Business | Q&A: Tax credit problems

[Dipply75]

this is where I get confused. I had a huge argument with them as my income differed by about £7K last year. I expected (and told them) I would earn £14500 for 07/08 with the prev year as £7500 (mat leave etc) and got my award confirming these 2 figures.

 

Come my renewal turns out I earned £7K less (mat leave again lol) so thought I was due a lump sum for underpayment. Phoned them and they said no, we oopsed and used the lower prev years figure.originally. Ok this time as I had a baby which dropped my expected income - otherwise there would have been a huge overpayment!

 

They told me that the £25,000 threshold was for just for having to tell them within the year, they would still calculate on your exact income come the renewal - so its misleading people into saying nothing until renewal then being hit with overpayments.

 

Is that right or was I just told gumph again?

 

DBY - Apparently they use the lower figure to calculate, did you tell them you expected to earn more? If so you may have case as you did inform them.

[Goldlady]

That's my understanding of it as well - that you don't have to tell them but that they will make adjustments once your income figure is confirmed. Seems ridiculous that your income could alter by 25K without needing to tell them as obviously that is going to cause a massive overpayment. Unless of course your income has gone up from 75K to 100K in which case it probably wouldn't matter:D