I have a client who is currently receiving full tax credits having moved into work from Income Support in April last year. He will earn about £23K. I know that the increased income disregard is going up in April 06 from £2500 to £25k. Will this help my client who is clearly being overpaid to the tune of about £4k? or is it only increases in the tax year 06 - 07 that will be affected?

any ideas?

The latter I'm afraid.

Why is your client "clearly being overpaid"? When he started work I assume he notified the helpline that he had commenced employment and supplied an estimated income figure for the year?

Thank you both for your help.

Clearly overpaid in that although he notified the tax credit office of employment, and got the 50+ element his current year income has not been taken into account and full tax credit has been paid.

Good reminder though that I should double check whether he gave an estimated income figure for this year although I fear not. The same client did not notify carer's allowance about his work and has continued receiving it for a year...