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TonyTax
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It used to be the case that, in any given tax year, you could

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It used to be the case that, in any given tax year, you could earn more than the projected figure for that year given to HMRC and, if it was below a certain amount, it was ignored and there was nothing to repay. Is this still the case?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi. Can you tell me what you mean by "the projected figure for that year given to HMRC" please. What do you mean by "nothing to repay"? Are you referring to tax credits? If so, the "income disregard" still exists and you can read about it here.

I hope this helps but let me know if you have any further questions. I have to go out for about 30 minutes but I will be back.

Customer: replied 2 years ago.

Hi - I tell HMRC, for example, that in the forthcoming tax year I expect to earn 12,000. At the end of the tax year I have earned more than that and it used to be that you could earn more and not have to pay back any tax credits from that year provided that the amount you earned was less than a certain amount. Is this still the case.

I understand income disregards ***** ***** this year/previous year income as a basis for setting the current year's award but my question is not about that.

Expert:  TonyTax replied 2 years ago.
All there is income disregard as far as tax credits is concerned. There is no other system.

The income disregard counts for any year as it says here under the heading "History of the income disregards". It says and I quote "Its (the income disregard) purpose was to provide a ‘buffer zone’ in which a family’s income could increase during the course of a year without affecting their tax credit entitlement" (for that year).

So, if in a tax year, your award was initially based on the previous year's income which it always is unless you tell the tax credit office any different and you did some overtime for a period which bumped up your income for that year, provided the extra income was within the income disregard limit for that year, you would not have to pay the excess tax credits back.

The income disregard system is the only system that exists to allow a certain amount of excess tax credits not to be repaid.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15835
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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