Can anybody confirm if the lower threshold for tax credits of £6420 is the total for two working joint claimants or is this per working person?
I assume it's the former but have clients who claim WTC and CTC. One is employed earning c£10k the other is self employed and available AIAs mean we could reduce income to nearly nil (if, as I expect, this maximises their joint tax credits claim) or to £6420 (the threshold) or purely to the point where no tax or class 4 nic is payable - more tax efficient obviously.
Hopefully somebody can clarify this for me.
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Online tax credits calculator
Income of £6,420 or less gets the full tax credits, so claiming Capital Allowances to reduce income below £6,420 is not cost effective.
You can run the figures on the following webpage to confirm this:
http://taxcredits.hmrc.gov.uk/Qualify/DIQHousehold.aspx
PS. Bear in mind that this HMRC calculator doesn't show a whole year's entitlement, it pro-ratas from a current date to next 5th April.
Seriously?
for all related people living under that roof including parents, children, siblings, grandparents and other family members.
Has something changed in recent years?
I can find nothing in the legislation or manuals that requires a joint claim to include anyone other than those living "as a couple" ie married or in a similar relationship (including polygamous units but not including "vertical" relationships). TCTM06100.
Likewise I can find nothing in the definition of income regulations that requires you to bring in income other than that of the claimants. TCTM04002.
With kind regards
Clint Westwood