Working Tax Credits

[SC00BY]

I am about to leave a £50,000 a year job. For a 12,000 year one.
Can I immediately claim WTC. Or is what i've already earnt this year, taken into account

Many thanks

[factor-fiction]

You may find they base it on previous earnings. If you look on the new direct.gov site (I've forgotten its name) there will be a guide. They will take account of other household income if you have any.

[IggyB]

New claims for Working tax credits are based on your earning for the last financial year. This intro leaflet might help http://www.hmrc.gov.uk/leaflets/wtc8.pdf

Presumably as you have been on a high wage you will have saved up and made plans to support yourself in your new job rather than relying on tax payer support immediately so I hope the wait is not a problem.

[SC00BY]

Thankyou for you're answers,

I have saved enough to support myself for 3 years, (with the lower wage) hopefully i'll find a job that will enable me to avoid claiming anything, within that time. I'm leaving the job I have through no fault of my own. And basically have taken the lower paid job, rather than have no job.

Thankyou once again

[1eyedjack]

WTC is means-tested based on income on a tax year basis. Both prior year and current year earnings are relevant to the calculation. Based on your info it seems likely that your 2011-12 income was about £50K and 2012-13 income will be about £40.5K (£50K x 3/4, + £12K x 1/4). Based on these figures you would be unlikely to qualify for a positive award until 2013-14, during which year your income will be about £14.5K (£12K + £2.5K statutory disregard in reduction of income). If you are married (or in similar relationship) the combined household income of you an spouse would have to be taken into account. If you have savings income, then the excess of taxable savings income (combined if joint award) over £300 would have to be taken into account. To qualify at all you would need to be working a minimum number of hours per week. The minimum varies according to whether you have children, whether it is a joint award with spouse, and whether there are any disabilities among claimants or children. Essentially, provided that you work at least 30 hours per week you would qualify (subject to abatement). If you work less than 16 hours per week you would not qualify. Between those limits it depends on the above factors.

Tax credits are being phased out in favour of a less generous Universal Credit, with a transitional period for existing claimants. I may be wrong but my recollection is that 05 April 2013 may the last date for entering a new claim. Accordingly, if you expect to qualify for a positive award in 2013-14 then you would be well advised to enter a claim before 05 April 2013 even though for 2012-13 you might expect it to be means-tested to zero for that first year.