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Hi, what I am asking is if I can offset the £400 I have earned in some way by for example paying into a pension or paying childcare costs?
Sorry, I am not a tax expert and am asking for an answer in simple terms. I have looked again and again at the tax office website and it doesn't answer my question above, that is why I have contacted this site. - I am, to put it very simply, looking to see if I can reduce our joint income by the £400 I have inadvertantly pushed us over the limit by. If so, how? For example, if I was to set up a pension and pay £400 (equal to the amount I have earned this year) will that cut my taxable earnings to nil? Or, if I were to pay £400 in childcare costs? Or is there anything else that is a factor that I should be thinking about?
Child care costs don't count so you can discount them altogether. However, pension contributions either to your own private pension plan of by means of Additional Voluntary Contributions to your employer's scheme do.
Please have a gander at the Government web site to which I have drawn your attention. It sets out in full detail the amounts which can be deducted from your earnings for a tax credit application.
I do hope I have covered all the points raised.
Ok, that second section that you have suggested I have a gander at is very useful - thanks. I hadn't spotted that before. Actually, my husband already pays into a private pension (£100 a month) and we have never declared (or deducted it before) - we didn't realise we could, so this should cover the difference. To check I have understood correctly, any amount that we (my husband or I) pay into a private pension scheme (as long as it doesn't exceed £40k or salary etc) can be taken off the income we declare as household income on the form we fill in for child tax credit purposes? Hoping I have understood correctly.....
Yes, I will give you a positive rating, as soon as we sign off (hopefully after this email). There is however one last part of my query that I would like clarification on. That is the award itself. I can not work out from tax office website if it is staggered in chunks or changes to reflect smaller increases or decreases in household income - that is to say, was I correct in assuming if our household income exceeded the £30,000, the tax credit award would drop by several thousand - or have they just chosen specific salary brackets for illustrative purposes? I haven't explained that very well, I think I am asking would we really lose in excess of £2,000 as a result of tipping over the £30,000 by a few hundred or would it be a lesser amount to reflect the fact we are just over the threshold (ie have I been worrying about nothing?!)