Child Tax Credit

[Zak33]

Hi people

I've got two days booked off work to sort through my finances, cos it's a big old job sorting tax returns, Child Tax Credits and stuff, especially when there is CoD4 to be played

Now... simple question:

At what income level does Child Tax Credit ChildCare get withdrawn?

I understand the Child Tax Credit system fairly well, though it is a MINEFIELD, but I can't work out whether we're entitled to a Tax Credit Top Up for Childcare now that Zak Jr is in Nursery 3 days per week so that Sair can work.

http://www.hmrc.gov.uk/taxcredits/st...re-costs.htm#1
http://www.hmrc.gov.uk/rates/taxcredits.htm

Those two pages weren't linked, at least I couldn't see a way from the first one to the second one and had to google to find it. But even then... I cant' see what income I'd have to be under to claim it.

Can anyone help?

[Zak33]

I waited for a little while to see if you guys knew, and with respect, I wasn't hopefull, because it's shrouded in secrecy.

So I rang the help line and got a very helpful adviser who
a) didn't know
b) found that he couldn't find it anywhere in his information to hand
c) decided with sopme prompting from me to lower the salary in his calculator program until it showed as being payable.

So the answer is "roughly £30k combined income" before you can get some proportion of your childcare back, but I have no idea how much unless the official documents are completed with relevent numbers.

What a crock of crap. No one knows... no one can tell....

[Blitzen]

Well......my brother and wifes income is over £48K combined and they still get it for 2 children.

(about £20 per week i think)

[schmunk]

For the 09/10 tax year, working tax credits, including the childcare element, start to be withdrawn from £6,420, at a rate of 39%.

I would assume that you are entitled to (I apologise for crappy formatting):

Childcare element of the Working Tax Credit - £ per year (unless stated)
Maximum eligible cost for one child £140 / week = £7,280

Child Tax Credit - £ per year (unless stated)
Family element £545
Child element £2,235

Total = £10,060

Less £545 - Family Element of CTC, not withdrawn until £50k

Net - £9,515

Represents income of £24,397 + £6,420 threshold = £30,817 total income

Therefore, you should be receiving £545 + 0.39x up until £30,817 total income (where x is the difference between your joint income and £30,817), then £545 up to £50k, then a portion of £545 reducing to zero at roughly £58k.

The problem with comparing directly against the position without the Childcare element is that it changes the lower threshold (from £16k to £6k)...

Here you go - I made you a little table (again, apols for crappy formatting), all figures GBP:

IncomeW/out W/ Difference
15,000 2,780 6,714 3,934
16,000 2,780 6,324 3,544
17,000 2,406 5,934 3,528
18,000 2,016 5,544 3,528
19,000 1,626 5,154 3,528
20,000 1,236 4,764 3,528
21,000 846 4,374 3,528
22,000 545 3,984 3,439
23,000 545 3,594 3,049
24,000 545 3,204 2,659
25,000 545 2,814 2,269
26,000 545 2,424 1,879
27,000 545 2,034 1,489
28,000 545 1,644 1,099
29,000 545 1,254 709
30,000 545 864 319
31,000 545 545 0
32,000 545 545 0


Essentially, as your man said, you will see some benefit up to a total joint income of approx £30k.

[schmunk]

Also note - this does not have any effect on Child Benefit (currently £20/week for the first child), which is not income-restricted.

[Zak33]

SHMUNK....how on EARTH did you suss that lot out?

I find it a nightmare.. it alllooks right, but I dont understand the percentage cut offs.

[Zak33]

Well......my brother and wifes income is over £48K combined and they still get it for 2 children.

(about £20 per week i think)

that's not childcare I dont think chap...thats child support

[Zak33]

For the 09/10 tax year, working tax credits, including the childcare element, start to be withdrawn from £6,420, at a rate of 39%.

I would assume that you are entitled to (I apologise for crappy formatting):

Childcare element of the Working Tax Credit - £ per year (unless stated)
Maximum eligible cost for one child £140 / week = £7,280

Child Tax Credit - £ per year (unless stated)
Family element £545
Child element £2,235

Total = £10,060

Less £545 - Family Element of CTC, not withdrawn until £50k

Net - £9,515

Represents income of £24,397 + £6,420 threshold = £30,817 total income

Therefore, you should be receiving £545 + 0.39x up until £30,817 total income (where x is the difference between your joint income and £30,817), then £545 up to £50k, then a portion of £545 reducing to zero at roughly £58k.

it's the bit in bold I dont get.. where did this sum come from?

What has 24,397 quid got to do with anything?

[Funkstar]

SHMUNK....how on EARTH did you suss that lot out?

He's a tax accountant

Or something similar...

[Zak33]

ohhhh.....cool

[jim]

it's the bit in bold I dont get.. where did this sum come from?

What has 24,397 quid got to do with anything?

It think it's because the net allowance of £9,515 is equal to 39% of £24,397, meaning that £24,397 is how much you can earn (in addition to your initial allowance of £6,420) before all of the allowance (£9,515) is swallowed up by the 39% withdrawal rate.

[Lowe]

I'll be honest - I don't understand it at all and haven't claimed for the last two years, the system's way too bloody complicated. Not to mention I've heard horror stories of the Tax people getting it all wrong then lamping you with a bill reclaiming their mistakes...

[schmunk]

SHMUNK....how on EARTH did you suss that lot out?

I find it a nightmare.. it alllooks right, but I dont understand the percentage cut offs.

He's a tax accountant

Or something similar...

Correct.

[schmunk]

It think it's because the net allowance of £9,515 is equal to 39% of £24,397, meaning that £24,397 is how much you can earn (in addition to your initial allowance of £6,420) before all of the allowance (£9,515) is swallowed up by the 39% withdrawal rate.

[Zak33]

I'll be honest - I don't understand it at all and haven't claimed for the last two years, the system's way too bloody complicated. Not to mention I've heard horror stories of the Tax people getting it all wrong then lamping you with a bill reclaiming their mistakes...

then you and I need to talk cos it's money you are OWED!

When the little un was under 1 it was at it's highest, but none the less, it's still prollly worth £545 per year to you, minimum.

I dunno how far you can back claim, but either way, even if it's only current.... sort it.

[Zak33]

It think it's because the net allowance of £9,515 is equal to 39% of £24,397, meaning that £24,397 is how much you can earn (in addition to your initial allowance of £6,420) before all of the allowance (£9,515) is swallowed up by the 39% withdrawal rate.

cool...thanks.

Is that set yearly by Alastair "Dont call me Darling" Darling?