Tax credits hurt my head

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    Hi. How would people treat this scenario:

    CTC award notice dated 02/12/03.
    Award 0f £7235.87 over the full financal year (366 days).
    Amount already paid £6518.96. This is not arrears but payments received, since a CTC award has been in payment since April.

    What working tax figure would you use? Any help gratefully apprecited.


    I am making some assumptions here:

    [b:f503cdf04d]Assumption 1.[/b:f503cdf04d] You have had this person on HB since april 03, and that you had a previous Tax Credit award notice detailing their entitlement from April to Dec.

    [b:f503cdf04d]Assumption 2. [/b:f503cdf04d] Their level of award from April to Dec was higher than the CTC award mentioned in the latest award letter.

    If this is correct then it seems to me that this claimant has had their entitlement to TCs reduced due to an overpayment in the earlier part of the year.

    What I suggest you do is:

    Draw a line under their entitlement at Dec 2003. Any assessment for TCs from April to Dec would still be correct, as they actually received the tax credits income during that period.

    For the period from Dec to April 04, they have a revised entitlement to TCs of £716.91. (£7235.87 for year minus £6518.96 already paid)

    Weekly award for HB = £716.91 div by 126 days = £5.69 per day / £39.83 pw.

    Don’t get involved in the TC overpayment issue. The Inland Revenue have already sorted that out by reducing the award for the rest of the year.

    All you need to do is work on the basis of the most recent TC award notice.


    Sorry didn’t make it very clear. This is a new benfit claim starting from 12/01/03. Altough the tax credit is an old award.


    meant 12/01/04.


    This won’t make much difference to the outcome.

    We are still looking at the latest award – dated 02/12/2003 which says that for the period:
    2/12/2003 – 05/04/2003 the TCs to be paid amount to 716.91

    Over the 126 day period this represents, the payment equals 39.83 pw (5.69 per day).

    I’d say you should ignore any tax credits for the period before the HB claim.

    Period from 02/12/2003 – 11/01/2004 = 41 days
    41 x 5.69 = 233.28 to be ignored

    Remaining period 12/01/2004 – 05/04/2004 = 85 days
    Remaining 483.63 div by 85 mult by 7 = 39.83pw

    Hope that helps.





    see Neil – training officer knows best!!! 😀

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