How to split tax credits when my wife returns to PAYE

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frankbradz

Registered User
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My wife and I are jointly assessed. In 2012 she left her PAYE job and became self employed as a childminder. As she could earn up to 15k without paying tax we moved all tax credits to myself.

Next month she starts a new PAYE job. Her annual salary will be 33k and mine is 73k. Any advice on how we should now most efficiently distribute our tax credits?

Thanks
 
Hi,
She'll earn approx 24,700 this year?

There's a band of 26,300 that she cannot transfer to you. I'd transfer the balance of her tax band to you for this year. That way you're maximising the lower rate tax band.

Re credits, overall it doesn't matter, but its 'fair' that she fully uses her own credits in full.

Just note, if you've been claiming the home carer tax credit you should cancel that. If not all of her income will be charged at 40% until her income reaches the threshold, and then it'll get switched off anyhow.
 
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