Reply To: arrears of tax credits


Quick note on QuickCalc tool:

Susan – firstly yes it is all very confusing.

Hopefully this will clear up what the quickcalc tool is doing.

The quickcalc tool has two options for arrears: “manual” and “automatic”.

The “automatic arrears” are calculated by counting the days from the start of the award up to the date of the award letter. This is then multiplied by the daily rate of TC.

The figure this produces is very straightforward. Any TCs due before the date of the award letter are treated as arrears.

The other option for calculating arrears is by “manually” entering figures from the award notice. (i.e. stated arrears and “first payment” arrears)

However, when the “manually” entered figures leave a shortfall (in the case you quoted £80) when compared to the “automatic” arrears, you have to ask yourself why?

If the TCs payable before the award letter date are not being disregarded and treated as capital – why?

Personally I would use the automatic figure the quickcalc tool supplied.

The Inland Revenue will always take great delight in finding new ways to itemise awards.

However, I would say “Don’t get distracted”. As a minimum, you should always disregard payments for the period before the award letter date.

Hope this helps

Pete (the guy wot wrote the QuickCalcs)