Income Change - WTC


S

Steve

Since the kids are now all at school I've return to my previous fairly
lucrative career.

I estimated my income would be under the 25k notification level, just,
but I worrying a bit about it. One cos it took ages to sort out this WTC
in the first place, second my earnings may go over the 25k limit and as
I work on contract, I could concievably find myself claiming again in a
few months.

I've stashed the money away, not spent it, should I declare my income
now or wait till I know I've gone over the 25k bar?

Steve
 
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A

Andy Pandy

Steve said:
Since the kids are now all at school I've return to my previous fairly
lucrative career.

I estimated my income would be under the 25k notification level, just,
but I worrying a bit about it. One cos it took ages to sort out this WTC
in the first place, second my earnings may go over the 25k limit and as
I work on contract, I could concievably find myself claiming again in a
few months.

I've stashed the money away, not spent it, should I declare my income
now or wait till I know I've gone over the 25k bar?
Wait. Remember that the £25k is a disregard, not a bar. So if your income goes up
£26k, you'll only get "taxed"[1] on the extra £1k, not the full £26k. Next year,
however, it's a different story and you'll be "taxed" on the whole lot - although you
can increase your income by another £25k tax free.

[1] By "taxed" I mean it'll serve to reduce your tax credits. It's the same as a 37%
tax.
 

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