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Tax credits overpayments


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Hi, I have received a letter from Tax Credits stating I have been overpaid by 943.00. Approx 700 of this is from tax year 02/03. I have my original letter stating income my income must not exceed 7500.00 or I may received too much tax credit and may have to pay it back.. my income for that year was £6100. I have stated this is the appeals letter. The other problem I have is that in August 05 I moved in with my partner so ceased to claim as a single parent. My partner has a good wage so we were not eligible to received any more payments. My claim lasted from April 05 to August 05. I then started working full time. When i queried the 200 overpayment for this year I was told it was because my wages had increased for 05/06??? Surely after Aug 05 I could earn as much as I like as I was no longer claiming but they say not they still assess me over the whole year. Had I been told this I would not have increased my hours. Anyone any advise as I am still awaiting the outcome from DWP:p

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Tax year 02/03. Assessment will have been been done initially on 01/02 earnings. At the end of the tax year it will have been re-done on 02/03 earnings less up to £2500*

 

If 02/03 earnings more than £2500 higher than 01/02 then the first £2500 for 02/03 is ignored. If earnings did not increase by £2500 then the assessment would have remained on 01/02 earnings.

 

Ask them for a copy of their calculation as a starter.

 

05/06 - they are correct in what they are saying (assuming calculation itself is correct).

 

Not asking you to disclose answer to this bit. If your joint earnings are below £58000 (after deducting pension contributions) then you can still claim £545 per year. If over this amount then you may still be entitled to a smaller amount. Not a lot but if you have to repay it is worth claiming.

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Guest Gertie100

your joint earnings are below £58000 (after deducting pension contributions) then you can still claim £545 per year. have to repay it is quote]

 

Don't mean to hi-jack here, but after pension contributions? Is this completely 100% true? Haven't been deducting pension contributions from our claim...oh dear...:eek:

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[quote=Gertie100;995415

Don't mean to hi-jack here, but after pension contributions? Is this completely 100% true? Haven't been deducting pension contributions from our claim...oh dear...:eek:

 

Yes it is true. If you have pension deductions made by your employer then the taxable pay is after the deductions, so you do not need to deduct again. If you pay pension contributions directly by say direct debit from your account to a personal pension then you do need to deduct it.

 

More details are on page 32 & 36 of HMRC's booklet (link below)

http://www.hmrc.gov.uk/forms/tc600-notes.pdf

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Thanks, our joint earnings are no where near £58000 ( i wish) but when we claimed as a couple was told we dont qualify? Think I will wait for the outcome and claim again - if I do have to pay back the 900 I would rather pay it back from tax credits I wasnt getting anyway.

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Sorry made a slight error, the limit is £50K per year to get at least £545pa.

Here is a link to HMRC’s booklet which gives examples of what you can get depending upon number of children and income. They are in the process of updating the booklet to include 06/07 rates so some of the amounts due are currently underquoted.

I am guessing your joint income is above the limit for getting the standard working tax credit in addition to the child tax credit.All their quoted amounts are on the basic elements you can claim. There are others that you can claim, for example, you can claim up to 80% for approved childcare costs (includes after school clubs) if you both work at least 16 hours per week.

http://www.hmrc.gov.uk/leaflets/wtc2.htm#b3

HMRC also have a calculator you can use to work out your own award. It only asks for financial information to work out an estimate of the award, there is no fields to put your name, address etc.

http://www.taxcredits.inlandrevenue.gov.uk/Qualify/DIQHousehold.aspx

If you do pay childcare costs and your award is low then there other schemes that may be of a greater benefit. You can take the childcare element off your HMRC claim and use childcare vouchers instead. The childcare vouchers offer a reduction to your tax and national insurance and both your partner and yourself can claim. It is sometimes better to use this option if available, and many have online tools for you to work out how much you can save in tax/national insurance. The downside to these schemes is that it has to be offered through your employer. Although there is some administration required by the employer they too can claim a reduction to their national insurance, so it can be an advantage to them to set up the scheme. One such scheme is run by busybees. Although their site gives a lot of information about how childcare vouchers work, I cannot post a link as I think it is classed as a commercial site.

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Guest Gertie100

Thank you -will amend this years declaration taking the pensions into account!

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