Lara45

We arrived back in the UK last May. In August I managed to get work and so decided to apply for working tax credits. This was granted and came through in December but it now looks as though all the money they paid us will have to be paid back (something like £5000).

I remember the paperwork asked for income for 2009-2010 and how the hell I did this I just don't know ... I only put my salary in and that was just an estimate.

So now we have to fill in the 'declaration' of our income for 2009 to 2010 and this is causing one big headache. On the form it asks for gross income before tax and national insurance ... we were in the US so didn't pay national insurance.

We don't have any pay slips to work from, the tax year runs on different months, I was paid hourly so without any info I can't work out how much gross, weekly, I was paid ... ARRRRGHH

Anyone have any ideas?

paulpur

you could possibly look up your 1040 form that you filed in for the IRS, that should have your gross wage on it if i remember correctly, it would also not matter about it having to be pre-tax and NI as the gross on the 1040 would be pre-tax and SS wouldnt it?

Lara45

Normally if you put gross then the taxman would be able to figure out from the P60 what the deductions are. If I put gross from salaries in the US the figures just aren't going to tally ... I mean we were paying federal/state tax and medicaid etc. Am I making any sense?? I have a serious headache ...

paulpur

yeah you are making sense indeed, but the system isnt lol (big shocker there hehe) ...if the taxman wants to know the income level before tax he should just ask that, if he wants to know what they are after deductions, then he should ask for that lol , no point in him asking for gross when he really wants to know how much you made after deductions lol...doesnt make sense to me , but then i can be really slow sometimes LOL

aries_bird

Hi Lara,

Unless I am missing something here, I cannot see why you would have to declare anything for 2009-2010.

You were only resident in the UK from May 2010 so any declaration that would be due was your total earnings for 2010-2011 and you should be able to get that information from your P60 which you should have received around the beginning of April this year.

Your tax credit entitlement would then be adjusted taking into account what you earned 2010-2011 and paid 2011-2012.

Have you tried calling the IR Tax Credit people and telling them that you were not resident for the 2009-2010 tax year (you weren't as it "closed" on the 5th April 2010).

Good luck!

Lara45

Well this is what I was thinking initially. But now they're asking for income for 2009 to 2010 and income for 2010 to 2011. I do have my P60 to show income for 2010 to 2011 - its just the period from 2009 to 2010.

When I read through the forms it asks for any foreign income as well as pensions before deductions of income tax and national insurance. This is what is so puzzling. I'm just so nervous now because on the actual form I only put in my salary for the US (and that is wrong as well)

aries_bird

I would call them and explain you are in a pickle & may have confused the issue. Act daft but be honest, you were not familiar with the tax credit system, you had just returned to the UK and was confused by it all.

Ask them why you have to declare income for the tax year before you arrived.

Some people have foreign income and Uk income and would have to declare, but if you were not resident for this period you shouldn't have to.

They will probably have sent this letter/form because you will have made reference to that income in the past.

You could always fill it in simply by saying NO UK INCOME not resident in UK for this period, and see how you get on.

I find it's quicker to speak to them though because these forms and letters get sent to and fro all the time, and every time they change something on their system you get a whole load of new assessments, forms, letters etc

formula

Because you have to, apparently. This was discussed on a benefits forum the other month as someone had arrived in the UK, claimed welfare straight away and put their earnings for the previous year (in another country) as £0. Tax Credits caught up with them eventually and they had to pay all their WTC back for that first year of claiming.

The forum did give the link that showed where you had to declare your income that you earned before you came to the UK and claimed welfare, but I can't find that link now.

ann m

Most systems work a year behind. They will want to know your 09/10 earnings so they can verify you were at the right scale, for want of a better word, in the 10/11 year.

In turn, what allowances you have for now, 11/12, will be based on what you earned last year - 10/11.

Clear as mud? Good.

formula

According to the Tax Credits guidance notes that arrive with the tax credit claim form, you should declare this:-

"If you worked outside the UK in" (previous tax year) "you should enter your earnings in British pounds, not the foreign currency."

(page 12) in bold http://www.hmrc.gov.uk/forms/tc600-notes.pdf

You are best to declare all income unless you want to risk an overpayment and multiple compliance investigation enquiries. Which is what seems to have happened here?

formula

I've just enclosed a link in my previous post, to the guidance notes that you received with your claim form. We fortunately don't have to claim Tax Credits, but the guidance looks fairly straight forward.

The only reason they mentioned national insurance, is because most people have worked in the UK; but they also say (in bold) that if you have worked outside the UK, they want your gross earnings converted to pound sterling.

They want proof of your yearly gross income for you and your partner; don't take any deductions off as they want to know your total pay from all your employed work, including things like tips, gratuities and any sick pay; before tax and any other deductions. The guidance notes also mention things like shares and stock from your job, redundancy pay (except the first 30k), strike action pay and any pay while in prison.

If you don't have your pay slips, what figues did you work from when you filled in your claim form? Can you get copy payslips from your previous employers?

They want those gross salary figures from the US, with the proof you have; then your figures will tally. They will decide what they will allow to be deducted and what they won't.

The word "Tax" in Tax Credits is confusing and they should never had been called that. Many people missed out on claiming as they didn't work and therefore thought they couldn't claim as they didn't pay tax.

Tax Credits is nothing to do with paying tax; Tax Credits is an Income Based Welfare payment. Therefore, there are no deductions from the taxman as you aren't paying tax, you are asking for state welfare because of your low earnings.

With Tax Credits it seems you tell the government your gross earnings for you and your partner and they only allow deductions for a few things; again these are mentioned on page 12 of that link I gave to the TC guidance notes.

Basically, if you have not given them the figure of your full gross earnings for you and your partner, now is the time to tell them as it sounds like you have triggered a compliance enquiry; they want proof of your figures. From what I have been reading on the welfare forums, many people have received these and they have not given the correct figures to Tax Credits; so if this is what has happened in your case, you are not alone.

just_jenn

No advice to give - just wanted to wish you luck and a speedy resolution!

I'm currently trying to navigate the system myself. I'll be moving back in 3 weeks with my son (so once I'm working I believe I may be eligible for some kind of credits for childcare) but no one seems sure what my marital status is. Legally I'm married, but my husband won't be joining me until May 2012, more likely December (he'll be in the USA). I've been told to list myself as married, single, and separated by different folks (and this is on their helpline)...sorry, didn't mean to hijack your thread, just wanted to share some consolatory stories, haha!

formula

From what I have read, benefits staff often give out the wrong advice. Unfortunately, the onus is on you to give all the information and then check your claim; as you are the one that signs the declaration and the one who will have to suffer any consequences for false information.

This forum has some benefit staff helping out and someone will usually be able to show you where the information you require, is written down on the government's welfare sites.
http://forums.moneysavingexpert.com/...play.php?f=139

Failing that, the safest option seems to be: put everything down about your husband on the claim form, keep copies and let them decide what you can and can't claim. Keep it all in writing as evidence, in case of an investigation at a later date. Never throw these copies away as there is no time barring to investigating suspected overpayments of welfare payments.

Edited to say; you don't have to be working to claim the welfare payments called Child Tax Credits and Child Benefit.

johnh009

The whole UK tax system is in a sorry state. When I call their call centre, I get a different answer depending on who I speak to. This just about says it all:



http://www.guardian.co.uk/money/2010...rry-tax-errors

formula

That is a story about paying tax: it is nothing to do with Tax Credits.
Tax Credits is an income welfare payment that people can apply for if they need financial help from the state welfare system.

Tax Credits came in about 2002 under much protests that is was a far too generous welfare payment. It is also the welfare payment that has the most fraudulant claims. It's being phased down and then out.