Changes to Tax Credits

April 2011

The rate at which relief is taken away from you is increasing from 39% to 41% in April 2011.

Currently you could be eligible if your household income is up to £58,134 but in April this will fall to £41,329.

Currently if you have a baby during the year you receive double the family element but that will stop in April 2011.

From April 2011 when your income changes up or down by more than £10,000 compared with the previous year this will be taken into account in revising your award. Currently the figure is £25,000. In April 2013 this figure will reduce again to only £5,000.

April 2012

It is proposed that in April 2012 the current rule of notifying changes to the TCO up to three months late will be tightened to only one month – before you lose out on the benefit you would have otherwise received.

From April 2012 there will be a disregard for reductions in your income of £2,500 or less. This means that the first £2,500 of any income reduction is ignored when re-calculating the award for the previous year.

April 2014

Finally it is expected that a new system of ‘Universal Tax Credits’ will replace the current system in April 2014 but few details are currently available.