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DanAronG

initial tax credits - based on previous income?

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Hi

 

My first child is due at the end of september and I am confused by the tax credits situation.

 

Am I right in thinking that they will be assesssing my elegability for tax credits based on my and my partners income from last year?

 

She is due to take maternity leave in 2 weeks time, its only statutory maternity pay and considerably less than her normal salary. So if any benefits that are due are based on last years income, it will have no relevance to our actual income.

 

If I put her current earnings into the calculator on the government website, it gives us yearly tax credits of approx £500, however based on our actualt income once the child is born, ie stat mat pay, it would be more like £3,600.

 

So what will I be entitled to?

 

Also, at what point do you actually need to apply for it? Before the birth or after?

 

And also, at what point would you actually start receiving anything?

 

Basic info about us, in case this effects things:

 

both work ft on £17k pa each.

In 2 weeks she will be down to stat mat pay.

Mortgage payments of £600 pm.

No other major outgoings and no other income.

 

Sorry if all of these questions have been asked before, and thanks for taking the time to read this post.

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Yes it is based on the previous tax years income.

 

When she is receiving SMP, the first £100 per week is disregarded (you must inform them she is on SMP though). You can claim child tax credit from when the baby is born.


My advice is based on my opinion, my experience and my education. I do not profess to be an expert in any given field. If requested, I will provide a link where possible to relevant legislation or guidance, so that advice provided can be confirmed and I do encourage others to follow those links for their own peace of mind. Sometimes my advice is not what people necesserily want to hear, but I will advise on facts as I know them - although it may not be what a person wants to hear it helps to know where you stand. Advice on the internet should never be a substitute for advice from your own legal professional with full knowledge of your individual case.

 

 

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if your current year estimate is lower then they will use that figure, but you must tell them about the smp.

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So will they adjust the credits based on the fact that my income will be substantially lower? Or will they just increase the payments next year?

 

Also, should I be contacting them now about it? Or do I have to wait until after the baby is born?

 

Thanks

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You can claim tax credit from the day the baby is born.

 

Once you are on tax credits, you inform them of any change of circumstances which could affect your award on the day it happens, or shortly afterwards. If you leave it too late you run the risk of an incorrect award at the end of the tax year.


My advice is based on my opinion, my experience and my education. I do not profess to be an expert in any given field. If requested, I will provide a link where possible to relevant legislation or guidance, so that advice provided can be confirmed and I do encourage others to follow those links for their own peace of mind. Sometimes my advice is not what people necesserily want to hear, but I will advise on facts as I know them - although it may not be what a person wants to hear it helps to know where you stand. Advice on the internet should never be a substitute for advice from your own legal professional with full knowledge of your individual case.

 

 

Please do not seek, offer or produce advice on a consumer issue via private message; it is against

forum rules to advise via private message, therefore pm's requesting private advice will not receive a response.

(exceptions for prior authorisation)

 

 

 

 

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You have my sympathy - I had exactly the same problem, except I was both the main breadwinner and the pregnant person! I've had nothing but battles with the tax credit system, so here are some tips:

 

  • keep detailed notes of all the information you provide to the tax credit staff, and record dates and details of any telephone conversations - depending on who you talk to can depend what information they give - and they always deny it later!

  • phone the tax credit helpline and explain that your income for 2009/10 is going to be considerably less than for 2008/9 and ask to provide an estimated income. ask them to help you calculate your estimated income - I think you get to take off some of the SMP payments - check with them.

  • you can claim working tax credit even if you don't have children - but the income cut off point is about £16K i think.

  • you can claim child tax credit and child benefit once the baby is born - but don't take too long to register - you can't backdate too far.

  • it pays to be as honest as possible and to phone them with updates if anything changes - as invariably with estimated incomes they come back at the end of the tax year and say you've been overpaid. so far they reckon they've overpaid us about £2000, however, as they're only asking me to pay back about £2 per week I'm not that bothered!

  • I'm afraid that in my experience you probably earn too much money even with SMP to get any decent amount of tax credits. no matter what the tax credit, and how much you earn, they seem to like to keep you with a household income of approx. £20K pa - try putting different amounts into the tax calculator and you'll see what I mean. -GOOD LUCK!:D

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Thanks for your help :), much appreciated, in spite of being rather grim :mad:.

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