Child tax credit + child care help !

[lukemg]

How confusing ?? Please help.
Got a kid - 2yrs old.
Missus is working 16hrs a week.
I am contract through ltd (12k/year salary)
Can she claim any tax credit ? Do my dividends count ?
Childcare - just about to start nursery, planning to pay 55/week direct from ltd and make up the rest (31/week) personally, is there any issue with this ?
Any help appreciated, tried a search but more confused...
TIA

[northernladuk]

How confusing ?? Please help.
Got a kid - 2yrs old.
Missus is working 16hrs a week.
I am contract through ltd (12k/year salary)
Can she claim any tax credit ? Do my dividends count ?
Childcare - just about to start nursery, planning to pay 55/week direct from ltd and make up the rest (31/week) personally, is there any issue with this ?
Any help appreciated, tried a search but more confused...
TIA

Haven't a clue but the following search brought up a heap of past questions on this one which might help...

child credit site:forums.contractoruk.com - Google Search

[bless 'em all]

Tax Credits

Are you already receiving tax credits of any sort (child element)?

Tax Credits are calculated against the household income. If you've properly declared your dividend income on your claim then you'd be getting nothing (income too high) or the basic family element.

You could add the childcare to your tax-credit claim, but your entitlement will be tapered to nothing.

If you haven't declared your dividend income you're commiting tax-credit fraud.

There are ways to legally declare a lower than expected income (remember, you're being asked to guess what your NEXT YEARS income is going to be) but I'm not telling.

[prozak]

How confusing ?? Please help.
Got a kid - 2yrs old.
Missus is working 16hrs a week.
I am contract through ltd (12k/year salary)
Can she claim any tax credit ? Do my dividends count ?
Childcare - just about to start nursery, planning to pay 55/week direct from ltd and make up the rest (31/week) personally, is there any issue with this ?
Any help appreciated, tried a search but more confused...
TIA

Err OK. I'll have a shot.

Childcare - no problem here and no further tax to pay.£55/week is the limit.

Tax credits.. hmmm... why bother.. but i believe your whole income counts.

[Support Monkey]

Tax Credits are calculated against the household income. If you've properly declared your dividend income on your claim then you'd be getting nothing (income too high)

thats right its all worked out on your yearly houseold income so it depends on your lifestyle if you can afford to keep dividends low then you will get more family tax credit, keep the dividends low and rinse the system for as much tax credit has you can get then when they get to 16 (Depending if they continue in education) you will have a massive warchest in the company. i keep my PAYE at minimum wage rate and put dividends in as other earnings so no questions asked

[lukemg]

Thanks all, think that clears it up. Forget the tax credits, dividends are in the mix so no chance.
55/week at childcare still worth it but should I pay the full amount ~£86 from company or chip rest in personally (clearly less messing to do from co)
TIA

[Greg@CapitalCity]

55/week at childcare still worth it but should I pay the full amount ~£86 from company or chip rest in personally (clearly less messing to do from co)
TIA

If you are a basic rate taxpayer there is almost nothing in it. Either the excess (86 - 55 = 31) gets taxed as a benefit in kind (increases your PAYE and employers NI, decreases your Corp Tax), or else you pay personally from your post-tax personal income. As you say, might just be easier to pay the lot from the business, and put the £31 a week on the P11D.

Its also worth noting the monthly rate you can claim is £243 for childcare. This works out better than £55 per week, so see if you can make your childcare payments monthly.

[lukemg]

Nice one, many thanks Greg

[psychocandy]

How confusing ?? Please help.
Got a kid - 2yrs old.
Missus is working 16hrs a week.
I am contract through ltd (12k/year salary)
Can she claim any tax credit ? Do my dividends count ?
Childcare - just about to start nursery, planning to pay 55/week direct from ltd and make up the rest (31/week) personally, is there any issue with this ?
Any help appreciated, tried a search but more confused...
TIA

Unfortunately, dividend income is still income.... So probably not. I'm same as you with Mrs working part-time but no chance on contractor money.

Then again I did know someone who did one of those dodgy loan scheme things and they declared they're income as low and managed to claim tax credit too. Bit of a piss take that.

Wouldnt recommend that because it'll be even more you have to pay back when you get caught.