Home Home, Law & Money
If you need urgent support, call 999 or go to your nearest A&E. To contact our Crisis Messenger (open 24/7) text THEMIX to 85258.

Wages, Taxes and Tax Credits questions.

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
Hey guys, Hope you all can help,

Basically my job has changed somewhat and my Salary now has gone from 14250 a year to £17890 and I've gone from 40hours a week to 50hours a week.

Basically I have a few questions, Firstly when I work it out on a Tax Calculator I am paying a higher % in tax, should this be correct? I assume it is still the lower band of tax at 20% I just assumed the % of tax in relation to what I am earning is higher as I am earning more over the tax free allowance. Basically my hourly rate (after I take into account tax) from the tax calculator says I earn 15p less an hour on average than what I was before,

Basically if I did 40hours a week I get £5.75 PH AFTER tax if I do 50hours a week I get £5.60 PH AFTER tax

so whilst it is more money (as I am working longer) it is a lower average salary

Secondly, I thought tax credits cut off at around £17500/18000 as when I did an online tax credit calculator to see how much I would lose I was shocked to find that both working tax credit and child tax credit combined would drop from £130.00 per week to around £104.00 per week, a smaller drop than I expected and this was with the HMRC's online tax credit calculator, does anyone know (as I will end up doing overtime on top of this) when the cut off is or when it is severly cut off.

I am trying to find the limit as to when Working/earning more means I lose more (basically I want to know if I will lose more in tax credits than what I will earn) so I can prepare for this.

Thanks y'all

Comments

  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    For child tax credits, it's now around £40k per year. It's around £18k for working tax credits.

    40% tax kicks in at around £35k. The tax allowance for this year is £7475.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    http://www.entitledto.co.uk

    Excellent website, bung your details in there and see what it churns out.

    And for how much tax you'll pay: http://listentotaxman.com/
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    thats not the cut off for tax credits, you should still get something.
    We still get tax credits and my partner is on a lot more than that, although that might be because of disability element, im not sure.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    The amount of working tax credit depends on your earnings, how many hours a week you work, and whether you have a disability that "affects your ability to find work". The childcare element is also paid as part of working tax credit, so if you have eligible childcare the threshold will be higher. The amount of child tax credit depends on your earnings, how many children you have and whether they have any disabilities.

    As I say, you're best off sticking your details in Entitled To or speaking to a specialist benefits adviser who can do a "better off" calculation for you. I have a benefits calculator at work but mine's only valid for England and Wales.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    thats not the cut off for tax credits, you should still get something.
    We still get tax credits and my partner is on a lot more than that, although that might be because of disability element, im not sure.

    You get more if you / qualifying child has a disability and the cut off is higher.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Thanks guys, Sorry for the delay in replying, I've done the links you suggested and it seems all good :) admittedly I only get a little extra by doing a lot more hours but it's better than what I am relying on now.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    http://www.entitledto.co.uk

    Excellent website, bung your details in there and see what it churns out.

    And for how much tax you'll pay: http://listentotaxman.com/

    Both excellent sites :thumb:
Sign In or Register to comment.