Affects of amending returns on CTC

JodieR Registered Posts: 1,002 Beyond epic contributor 🧙‍♂️
I've found out whilst preparing this client's 07/08 return that he purchased a car in 06/07. My initial reaction was to amend the 06/07 return to claim capital allowances, but I don't know what effect this will have on his child tax credits claim.
His taxable profits in 06/07 were originally £20200, but can be reduced to about £19200 with the capital allowances.
His wife works full time, I would guess earnining between £15k and £20k a year. They have 2 children aged about 9 and 12.

By not claiming capital allowances in 06/07 he'll not be loosing out on tax relief, it'll just be delayed until he sells the car, but I would like to be able to say to him 'If I amend your return it'll reduce the payment you need to make on 31 Jan by £x, but you may/will loose out on CTC of £x as the dealine for finalising your tax credit claim has passed', or, if he can phone up the CTC helpline and inform them that his 2006/07 profits were overstated, would they recaluculate their entitlement and pay out the extra?



  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    If you reduce his income, this will not decrease his CTC but would normally increase it as the less you earn the greater your entitlement.

    However, in this circumstance the alteration would not affect CTC as you do not need to inform CTC of any changes of approx £2500 either way if my memory is correct.
Privacy Policy