HMRC Tax Rebate on Universal Credit

RompingOtter

Recently HMRC awarded me a tax rebate. I asked HMRC if this would affect my current claim for UC. HMRC said no as it is money that has already been paid, so I went ahead and accepted. Without warning my UC claim was closed and I did not not receive this month's payment. My claim is now being "rebuilt".

Icequeen99

RompingOtter wrote: »

Recently HMRC awarded me a tax rebate. I asked HMRC if this would affect my current claim for UC. HMRC said no as it is money that has already been paid, so I went ahead and accepted. Without warning my UC claim was closed and I did not not receive this month's payment. My claim is now being "rebuilt".

HMRC gave you incorrect advice. Tax rebates can sometimes be taken into account - probably best if you start a new thread to ask any further questions

IQ

Matt123UK00

Hi,

I am in exactly the same situation now, one year on from your enquiry.

Do you lose your Universal Credit for the month you received the tax rebate?

I have received a cheque from HMRC and have been sitting on it for a fortnight, scared to cash it.

I really want to use this money to pay some debt I have accrued whilst struggling to get by on UC. If it just gets lost in the system I will feel devistated.


Thanks in advance.

Icequeen99

Matt123UK00 wrote: »

Hi,

I am in exactly the same situation now, one year on from your enquiry.

Do you lose your Universal Credit for the month you received the tax rebate?

I have received a cheque from HMRC and have been sitting on it for a fortnight, scared to cash it.

I really want to use this money to pay some debt I have accrued whilst struggling to get by on UC. If it just gets lost in the system I will feel devistated.


Thanks in advance.

It depends what year the tax refund is for and whether you did any paid work in that tax year (the one the refund is for). If it is, then technically it counts as earned income in the assessment period and it would be taken into account for UC.

IQ

pocketfullofsixpence

For anyone else coming across this googling this one, it appears that UC do take into consideration tax rebates when calculating your entitlement; even if they are from previous employment. Confirmed by phone call with an adviser on the phone; it's treated as earned income not capital income. The document linked earlier in the thread clarifies that as well (Section 55 (4)A);

"A repayment of income tax or national insurance contributions received by
a person from HMRC in respect of a tax year in which the person was in paid work is
to be treated as employed earnings unless it is taken into account as self-employed
earnings under regulation 57(4)."

Seems like the government are keen to try and keep as many people off benefits or on low benefits as they possibly can, even if it's using money their previous employer took off them months and months ago with no good reason. Given benefits are supposed to reflect earnings this seems a bit daft. The only logic reason I can think for doing this is on the off-chance you claimed tax credits based on your earnings at the time of underpayment, but in that case why can't they check that on the record?

LeonNo1

I was told that a tax refund is classed as income & therefore February's UC payment was reduced to £22. Are they in their right to do this? I have put forward a mandatory reconsideration, but I was again told that Tax refunds are classed as income & I can not take this any further.
I don't believe this is right or ethical, but if I'm wrong, please, correct me.
Thanks!

LeonNo1

Danday

LeonNo1 wrote: »

I was told that a tax refund is classed as income & therefore February's UC payment was reduced to £22. Are they in their right to do this? I have put forward a mandatory reconsideration, but I was again told that Tax refunds are classed as income & I can not take this any further.
I don't believe this is right or ethical, but if I'm wrong, please, correct me.
Thanks!

LeonNo1

Whilst not knowing the legal aspects of this it does seem logical.
If net income is used to calculate the UC entitlement any increase in that income by virtue of a return of some of the tax that you paid would effectively increase your net income.
Likewise if the refund is treated as an addition to income, then you would not need the same financial help via UC as you would have the repayment as additional income.to live on.
Are you suggesting that you should continue to receive the UC award AND the tax repayment without one affecting the other?

sheramber

LeonNo1 wrote: »

I was told that a tax refund is classed as income & therefore February's UC payment was reduced to £22. Are they in their right to do this? I have put forward a mandatory reconsideration, but I was again told that Tax refunds are classed as income & I can not take this any further.
I don't believe this is right or ethical, but if I'm wrong, please, correct me.
Thanks!

LeonNo1

see post 19

bigbassman91

This has just happenend to me for £271.20 , surely they would of known i was due to get a rebate because i had to stop work last year due to health and should of advised me that i would get a tax rebate and need to declare it , I am on a lwc and undergoing therapy for many problems and refused all other benefit as i have no diagnosis and will take over a year to get it on the NHS, Now to be told my claim will be affected means eviction for non payment of rent in august , the state really does know how to smack you when you are down do'nt they regardless of your loyaltiy to it %^$k the uk i say

poppy12345

bigbassman91 wrote: »

This has just happenend to me for £271.20 , surely they would of known i was due to get a rebate because i had to stop work last year due to health and should of advised me that i would get a tax rebate and need to declare it , I am on a lwc and undergoing therapy for many problems and refused all other benefit as i have no diagnosis and will take over a year to get it on the NHS, Now to be told my claim will be affected means eviction for non payment of rent in august , the state really does know how to smack you when you are down do'nt they regardless of your loyaltiy to it %^$k the uk i say

It will be better if you started your own post with any questions you have, then someone can help you. It's easy to miss a post and gets very confusing when posting on the end of a thread that's a few months old.