Can someone explain tax credits to me please? (1 Viewer)

[mark]

needlessly complicated, and a total pain in the arse if you have more then one job.

ta.

 

[Goodbye]

Call me this evening

 

[7 - No tomorrow]

needlessly complicated, and a total pain in the arse if you have more then one job.

ta.

A tax credit is like an allowance off your gross that you don't have to pay income tax on.
You only pay income tax on a portion of your income (and some people on lower incomes don't pay any at all)

Your tax is calculated on your taxable income which is generally your gross less any allowances and tax credits.

It is not a deduction in your tax bill, but a deduction in the amount used to assess your tax.


I'm not an accountant, but that's how I understand it.

 

[classic seanc]

Here's one of the many occasions where Thumped proved its worth (post #3):
http://www.thumped.com/bbs/showthread.php?p=721516

I think tax credits are great, conceptually like.

I don't know anything about reallocating credits though.