We are seeing a number of cases where one partner has been made redundant and the other now becomes eligible to receive WTC. Am I right to assume that if an award is made on an estimate of current year income all the redundant partners income will be taken into account. Will the award be restricted to a relevant period? The award will not reflect the couples present income until the start of the new tax year when it can be based on an estimate of that years income.

If an award is made on a current year estimate, as we are now a fair way through the tax year, it is going to include some earnings for the redundant partner because tax credits are based on annual income. The income is spread over the year.

You are right about the award not reflecting their situation until next year, however you still have to be careful of what estimate is given next year in case the redundant partner gets a job (and again income will be spread over the year) and the estimate turns out to be too low. There could be an overpayment.

Victoria