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Tax Situation while on Mat Leave

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mummyinlove10 Posts: 908
just wondering for those of you not being paid by employers whats the wisest thing to do with tax credits etc for the time we are off - I will be getting just the basic maternity benefit from October so am I likely to get any tax back for this year or how does it all work also should i give DH my credits for time being as he wud now fall into higher rate of tax - i'm clueless just another thinking thing to add to the never ending list :wv
Moodles Posts: 547
If he falls into higher rate of tax and you don't then give them over. Always try and take credits at higher rather than lower rate.
Giant Underpants Posts: 953
My pay ran out this month so Ive transfered all my tax credits to my husband. Every little helps. As I understand it, and Im far from a tax expert - had I not transferred my credits to him I could get a balancing statement in January for this year and get any excess tax back then (because I would only have been paid for 8 months, but paid tax as if I were being paid for 12) I dont know what the best thing to do is, but basically we need the money now not next year so tax credit transfer it is!
Dipsy80 Posts: 1038
[quote="Giant Underpants":26ad52sc]My pay ran out this month so Ive transfered all my tax credits to my husband. Every little helps. As I understand it, and Im far from a tax expert - had I not transferred my credits to him I could get a balancing statement in January for this year and get any excess tax back then (because I would only have been paid for 8 months, but paid tax as if I were being paid for 12) I dont know what the best thing to do is, but basically we need the money now not next year so tax credit transfer it is![/quote:26ad52sc] That's correct. I'm an accountant and the tax you pay in the year will be the same whether you transfer the tax credits in October or just ask for a balancing statement after you receive your P60s. Well this is assuming that you are jointly assessed which most married couples on PAYE are. It's just up to you whether you would prefer the extra bit of cash now or a lump sum. Bear in mind that you will both need your P60s before you can apply for balancing statement and most employers won't give them out until Mid February so realistically you could be talking about not getting the lump sum until about April 2011.
MeSB Posts: 3785
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Giant Underpants Posts: 953
Yes you can - when I rang up they transferred them over then and there on the phone. Thats not to say your or his HR wont mess up when it comes to changing your tax certs twice in 8 weeks, but hopefully if you make sure they know what youve done it should work out ok....*disclaimer, again Im no expert*
deem Posts: 710
Just for information, make sure when your on maternity benefit, that is if your not being paid by work and only getting statutory maternity benefit that you apply or your DS applies for FIS ( Family income supplement) Not saying that all will be entitled to it but maternity benefit is not counted as family income and depending on DS weekly income something may come in useful. Also if family income supplement is granted if getting during summer months likely to get back to school allowance also. We got told this after my maternity leave finished when DD was born in 2007 so want to pass on to as many as possible Ps can only get FIS if DH is an employee(i think)
MeSB Posts: 3785
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