Confused re income tax debt & benefits

I'm posting this as I can't find any information about this but KNOW I'm not the only person in the same situation.

I was self employed for the last 18 months and I owe back (income) tax. I have had to bite the bullet and sign on for Jobseekers allowance as I have had no income since the 1st of June. I have taken into account my notice period payment which accounted for May's income & still didn't claim until the 1st of July as I had hoped to be back in employment by that time.

I did pay my basic stamp throughout the period, which is what you are told to do "otherwise this may affect any benefits you claim". Apparently this has zero bearing on whether you get contribution based allowances at all, which has also surprised me.

My claim has been taking a long time to process but I did expect that due to my circumstances.

What I expected to happen would be that I would receive a certain amount of benefit with a proportion deducted towards this tax debt?

However, I have been told by others that the State may reduce the benefit that they pay in the first place (because I owe tax) and then deduct a proportion towards the tax debt as well.

This sounds wrong to me but then I really have no idea how this is treated, any information would be greatly appreciated.
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