Taxable Employment Support Allowance

mrcol1000

I wondered if someone could offer me some advice.

I was forced to give up work due to a serious illness. I applied for ESA and was placed in the support group. I was awarded contribution and income based ESA.

In September my workplace awarded me an ill health pension after appealing their decision not to. I immediately informed DWP. They cancelled my income based ESA but I was still entitled to contribution based ESA.

I received a letter from Inland Revenue telling me that I had not been taxed on my ESA and they were changing my tax code and reducing my personal allowance due to this.

However when working out the reduction they have taken both parts of my ESA as taxable income. I have searched the internet and found that only the contribution part of ESA is taxable not the income based part.

Would someone be able to clarify this for me? I intend to write to them as when working out my tax code they have assumed I will recieve both parts of ESA till the end of the tax year. I just wondered if someone could help? Is the whole ESA benefit taxable if you receive both parts? Or is it still only the contribution based part?

Thanks in advance for anyones help.

mrcomment

The contributions based payments are subject to taxation.

The income based amount is not subject to taxation.

Perhaps there is no need to pay any tax if your income is still below the threshold of course. Sounds like an automated letter issued to you.

spider125

my husband was on invalidity benefit prior to 92 he is now on esa and is being taxed , he in support group but all documentation say if on ib prior to 1992 it is non taxable ?????

mrcol1000

Thank you for the help Only just read these. Will have to tell Inland Revenue they shouldn't be taxing me on the income portion of ESA. You would think they would already know this.