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  • FIRST POST
    • CakeCrusader
    • By CakeCrusader 17th May 17, 2:07 PM
    • 356Posts
    • 159Thanks
    CakeCrusader
    Tax credits wrongly using income from p60 and not allowing deductions.
    • #1
    • 17th May 17, 2:07 PM
    Tax credits wrongly using income from p60 and not allowing deductions. 17th May 17 at 2:07 PM
    Hiya.

    I'm just warning you about this as the tax credit office appear to be giving out the wrong information.

    I work from remotely from home (PAYE job, not self employed), and I'm allowed to deduct the costs that I pay to be able to do this from my income (some gas, some electricity, the tools I use to do my job as well as any travel expenses if I have to go to the office as it isn't my usual place of work). My tax credits suddenly came to a stop last week, and I was sent a bill from HMRC for just under 2k as they said they had overpaid me last year. I'd just received my P60, so I know that they had just received my income, which would be wrong as my P60 doesn't take into account any deductions apart from tax/pension/NI. I called, and spoke to a lady, and she said that they don't allow deductions from your income, and they only allow deductions for self employed people, and they use your gross figure. I contacted HMRC again later, and this information is incorrect; https://www.gov.uk/guidance/tax-credits-working-out-income

    I'm going to wait for my end of year thingy to come through, then call them again as I'd lost the will to live by the time I'd finished verifying my details, but I'm just letting you know that if you're told they calculate your tax credits from your gross wage, this is incorrect.

    I hope this helps someone, it's a bit of a shock when they just stop your tax credits with no notice and then send you a 2k bill!
Page 1
    • Darksparkle
    • By Darksparkle 17th May 17, 2:28 PM
    • 4,185 Posts
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    Darksparkle
    • #2
    • 17th May 17, 2:28 PM
    • #2
    • 17th May 17, 2:28 PM
    The action by HMRC is correct as far as their concerned. The do use your P60 figure and it would be up to you to correct it with any appropriate deductions as they have no way of knowing what these would be as they do not go through RTI.

    The advisers advice is obviously wrong though.
    • CakeCrusader
    • By CakeCrusader 17th May 17, 2:42 PM
    • 356 Posts
    • 159 Thanks
    CakeCrusader
    • #3
    • 17th May 17, 2:42 PM
    • #3
    • 17th May 17, 2:42 PM
    The action by HMRC is correct as far as their concerned. The do use your P60 figure and it would be up to you to correct it with any appropriate deductions as they have no way of knowing what these would be as they do not go through RTI.

    The advisers advice is obviously wrong though.
    Originally posted by Darksparkle
    I called last year and the person I spoke to then deducted my expenses no problem, so this one threw me (good job I checked). It just makes me wonder how many other people they have said this to.
    • Darksparkle
    • By Darksparkle 17th May 17, 2:45 PM
    • 4,185 Posts
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    Darksparkle
    • #4
    • 17th May 17, 2:45 PM
    • #4
    • 17th May 17, 2:45 PM
    To be honest at this time of year they put on a lot of additional staff with little to no tax credit experience so it's not really surprising if the wrong advice is given.
    • danielanthony
    • By danielanthony 19th May 17, 2:54 PM
    • 507 Posts
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    danielanthony
    • #5
    • 19th May 17, 2:54 PM
    • #5
    • 19th May 17, 2:54 PM
    I work from home and the only benefit I'm aware of is an increased personal allowance which works out to ~4 per week. This would not change the amount of taxable income on my P60.
    • sheramber
    • By sheramber 19th May 17, 6:16 PM
    • 3,164 Posts
    • 2,426 Thanks
    sheramber
    • #6
    • 19th May 17, 6:16 PM
    • #6
    • 19th May 17, 6:16 PM
    For tax purposes think you can claim the fixed allowance of 4 pw or you can claim actual expenses, but need to be able to justify the figures with bills, mileage logs, receipts etc
    • zagfles
    • By zagfles 19th May 17, 6:27 PM
    • 11,789 Posts
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    zagfles
    • #7
    • 19th May 17, 6:27 PM
    • #7
    • 19th May 17, 6:27 PM
    Do you deduct these expenses for tax too?
    • Dazed and confused
    • By Dazed and confused 19th May 17, 6:28 PM
    • 1,284 Posts
    • 517 Thanks
    Dazed and confused
    • #8
    • 19th May 17, 6:28 PM
    • #8
    • 19th May 17, 6:28 PM
    danielanthony

    I work from home and the only benefit I'm aware of is an increased personal allowance which works out to ~4 per week. This would not change the amount of taxable income on my P60.

    You have a fundamental misunderstanding of this as nothing can increase your personal allowance. You are confusing your personal allowance and your tax code.

    Your tax code could be increased by any job related expenses you have claimed and as you say these expenses will not change the amount of taxable income on your P60 but if you read your tax credits renewals notes you may find you can include the expenses as a deduction from your income for tax credits purposes. I'm not a home worker so don't know for certain about this but worth a look
    • CakeCrusader
    • By CakeCrusader 19th May 17, 7:35 PM
    • 356 Posts
    • 159 Thanks
    CakeCrusader
    • #9
    • 19th May 17, 7:35 PM
    • #9
    • 19th May 17, 7:35 PM
    The rules regarding tax relief/tax credits and working from home are odd, and they don't apply if you work from home by choice, and there's different rules if you're self employed. There's a simplified list here; https://www.gov.uk/tax-relief-for-employees/working-at-home

    "You can only claim for things to do with your work (for example, business telephone calls or the extra cost of gas and electricity for your work area).

    You can’t claim for things that you use for both private and business use (for example, rent or broadband access).

    You don’t need to provide records for claims of up to 4 per week (18 per month). For claims over 4 per week you’ll need to provide evidence of what you’ve spent."

    If you have to travel to somewhere which isn't your normal place of work (if you work from home but you have to go to the office for training/meeting), this is an expense too. If your expenses are less than 2.5k, you fill in a P87, or call them up. If your expenses are more, you have to fill in a tax return.

    For tax credits, the info is here; https://www.gov.uk/guidance/tax-credits-working-out-income, you need section 2 "what to take off your gross pay"

    Hope this helps!
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