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What Will Changes To Working Tax Credits Mean For You?

This week the House of Commons voted in support of the Chancellor, George Osborne’s, plans to cut spending on tax credits from 2016.

The plan is to lower the level at which tax credits are withdrawn and speed up the rate of decrease. This is will save an estimated £4.4bn.

Will I be affected?

Currently tax credits are withdrawn when earnings reach £6,420 but from April 2016 that figure will be reduced to £3,850. Opponents argue this will cost three million families an average of £1000 per year.

What does this mean for my income?

The government say that by 2018 – 2019 eight out of ten households will actually be better off thanks to the introduction of the national living wage and the increase in personal tax allowance to £12,500. There will also be an extension to childcare subsidies.

What this means for each individual family is unclear but there is no need to believe your income will reduce dramatically.

What should I do next?

If you are not currently receiving tax credits and you believe you might be eligible in full or in part it would be a good idea to follow the advice on the Gov.uk website.

If you are currently claiming tax credits you should be sent a renewal pack. Usually your credits will automatically renew but it is extremely important that you read the information enclosed very carefully because if you fail to advise the Tax Credit Office of changes to your income you might find yourself having to pay money back if you have been overpaid.

Changes you will need to inform the tax office about are detailed here.

If you are worried about your short term financial situation and are struggling to make ends meet we might be able to help you regain your financial footing. Even if you have a bad credit history our lenders can help as they specialise in poor credit loans. We offer some of the best loan rates available and all you need to do is fill in a simple online form.

Clare McDonald
Clare McDonald
As a mother of two, Clare knows the importance of being careful with money, so writes posts from personal experience.Clare also loves to find great deals, so shares her finding here.

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