Tax Credits V FRI?

[D-IFF_ident]

I've just received my Tax Credits return from those nice people at the Inland Revenue. Turns out that, because my FRI is assessable as income, I wasn't entitled to the Children's tax credit that I received last year. If this is correct, then my 30K FRI has been reduced to 18K by income tax and to 15K by losing tax credits. No doubt after I complete my self assessment it'll be reduced further.

Anyone else had dealings with tax credits v FRI?

[tradewind]

What are Child Tax Credit and Working Tax Credit

Child Tax Credit is a means-tested allowance that is paid to parents and carers of children or some young people who are still in education. If you or your family have gross income of less than £50,000 a year and meet the other qualifying conditions, you will be eligible for some award.

Working Tax Credit is a means-tested allowance for people who are in paid employment and who meet certain other conditions, based on income and circumstances (ie not much income).

I'm sure I'm opening myself up for abuse here, but can't you just enjoy the £15K? (think of it as a £15K tax credit if you want to appear to have gained something!).

[Bigtop]

Don't worry - you'll qualify again next year!
I was in the same boat a while ago.

And I agree - just enjoy it. Afterall, is it a bonus or did it really make you stay?? To be honest if the job was that crap I wouldn't put up with it for a free £15k. Not that i'd admit that to the AFPRB!!!!

[Spur Lash]

Diff

Same happened to me a few years back. Given 10K, (in 2 payments) 6K after tax. Tax code was set for a certain amount, which did not cover the grat issue of sterling, which meant my tax code was wrong, so I owed money back. Does that make sense??

Any way, as TW says, I should be grateful for the 4K I eventually ended up with. Or B......

PS. It took the taxman 2 years to notice how much I was paid, despite the fact they had taken 40% of it. Top tip; fill in a tax return if you get wadded. Saves heartache later-on down the line!!

[D-IFF_ident]

Thanks for the replies. Spent the 15K, wasn't going to leave before my 38th birthday anyway, so you all have a point. Just wanted to check I hadn't missed a trick.

[Hueymeister]

Interesing and slightly worrying...I took the FRI and didn't get dinged by them this year...watch this space though!

[Ginseng]

Don't understand your figures. With a top marginal rate of income tax at 40%, your 10K would have been 6K after tax. How did it end up costing you even more? Are you sure you don't need to talk to the Revenue again. It sounds to me that they might owe you £2000.

Regards