Sally - I think that receipt of a qualifying benefit (whether it be IS, ibJSA or PC), has to be at the same time as the period for which tax credit is awarded. If she is not on IS NOW, then HMRC look at her previous tax year's income, disregarding her IS but taking into account other, taxable income.
I think the Tax Credits Act s7(1) is the key, read in conjunction with the rest of that section, and providing that the assessment of relevant income is not required 'for so long as....the person is entitled to any social security benefit prescribed for the purposes of this subsection'.
Ie, now your client is no longer on IS, her tax credit is dependent on her 'relevant income' - in this case, 07/08 income, assuming income for 08/09 does not exceed it by more than £25,000.
Rachel
|