Tax Effect of JSA and HB?

SueC_2

I have a friend who has just found a job after 18 months of so of claiming JSA and Housing Benefit (WeeeeHeeeeee!!!), and we are trying to work out budgets etc for him going forward.

Does anyone know if he will resrospectively pay tax on the benefits he has received? I am pretty sure the answer is yes, but I'm not sure how much.

Is it just on benefits received in this tax year, or across the entire period? Is it just on JSA, or also on the Housing Benefit?

Does anyone know of a tax calculator that takes this into account?

Thanks all!

Gertie_Walker

Tax is calculated on an annual basis and JSA is taxable. HB is not. However, JSA is below the weekly tax free threshold of £125 pw, so there would be no tax to pay on JSA received this year. If he has been receiving £55pw JSA. then he would have £70 pw of his tax free allowances left from 6 April to the date he starts work. So, if he started work 20 weeks into the tax year, he would have £70 x 20 = £1400 tax free to use before he paid any tax on his wages. From then on, he would have £125pw tax free with tax payable at 20% on the difference.