Won benefits appeal- tax question

coin_operated_girl

Hi,

I wasn't sure whether to post this on the benefits board or here, but figured perhaps you guys would be better placed to answer my question.

I'll try and keep it simple...HM Revenue and Customs sent me a letter today saying that I have underpaid them tax. I'm 95% sure this is a mistake, but need to write to the DWP to get proof. Whilst I've been writing the letter, this has got me thinking...in Nov 2011 I "won" a incapacity benefit tribunal and was backdated IB for over a year. I am now in employment and have been since pretty soon after the tribunal, so I was over the taxable allowance for the tax year 2011-2012. I was just wondering (and I have a feeling that even if the answer is no, this may be more hassle than its worth), but as the IB money was backdated from a span of tax year 2010-2011 and 2011-2012 should all of the money be put towards my taxable allowance for the year 2011-2012? Because I was paid all of the money in the tax year 2011-2012, but had the DWP not incorrectly found me fit for work I wouldn't have been paid IB as a lump sum, I would have been paid about half of it over the tax year 2010-2011 (where I was no where near the taxable allowance as I was not working at all and so wouldn't have been taxed on it).

I hope that makes some kind of sense.

TIA

pjclar02

Hello there

The first 29 weeks of incapacity benefit are not taxable anyway. The remainder of the lump sum would be allocated to the year to which it relates, as opposed to when it is paid.