Tax credits.........Income before or after Vouchers?

[Abz1982]

OK, so I know that for SMP, they base the 90% calculation on the amount AFTER they take the vouchers - the amount you pay tax etc on....

So for tax credits...........should I use THAT same amount, or the wage my employer gives me before they take the vouchers off?

How can it be one rule for one, then another for something else?

 

[HPmum2B]

If you are talking about childcare vouchers, then it should be the salary after the vouchers are taken off. Its called salary sacrifice, you have given up a portion of your salary for the vouchers, so in they eyes of the tax man etc you earn the lower amount.

 

[ellismum]

Hmmm I'd check with HMRC. We chose not to take the vouchers as it does effect tax credits, don't forget your already benefiting from not paying tax on the sacrifice part.

 

[ellie27]

I would have thought it was based on your gross amount, before anything is taken off, even the childcare vouchers

 

[nugget80]

Amount you declare to tax credits should be after vouchers are taken off...

 

[Pearls18]

I don't know, we are better off with tax credits than vouchers and was told we couldn't have the 2 together so I never looked into vouchers. I will take vouchers when our income is too high for childcare tax credits, but right now we aren't entitled to any tax credits other than childcare ones, so is it possible to be in the position of still getting WTC but being better off with vouchers not CTC...if this makes any sense? Sorry OP not what you were aksing just curious now!!!

 

[ellismum]

Have a look here:

https://www.hmrc.gov.uk/calcs/ccin.htm

 

[Pearls18]

Thank you that is a great calculator although I did get really confused, it said if we took vouchers we'd be worse off, but if one of us too vouchers we'd be better off...eh?!

 

[ellismum]

Thank you that is a great calculator although I did get really confused, it said if we took vouchers we'd be worse off, but if one of us too vouchers we'd be better off...eh?!

It's never easy lol!! And it's all being completely re-jigger next year.

 

[ellismum]

Amount you declare to tax credits should be after vouchers are taken off...

Hun, if you are doing this you may be in for nasty surprise come renewal. You must always declare your gross income as stated on your P60. If this were true we'd go below the income threshold and be entitled to WTC as well the tax relief benefits of the vouchers which an abuse of the system. Xxx