HMRC Tax Rebate on Universal Credit

JCS1

calcotti wrote: »

But if the tax is overpaid in normal circumstances it is refunded and therefor3no tax is paid. In the case of someone gett8ng therefund while on UC they lose 63% of the refund and are therefore penalised by UC.it is UC that is the problem not tax - HMRC have returned the money.

I understand that. The issue is with UC treating tax refunds as income, it's nothing to do with NMW.

calcotti

JCS1 wrote: »

I understand that. The issue is with UC treating tax refunds as income, it's nothing to do with NMW.

I agree it’s nothing todo with the NMW, my argument is that it’s also not the tax that’s the problem because that does get corrected, the problem is the design of UC.

mineral68

I think we all agree that the problem is UC, but it still does EFFECTIVELY impact INDIRECTLY on the things like the NMW because if you are being paid £7.83 per hour and then paying emergency tax on this and then that EFFECTIVELY brings it below £7.83 - below the NMW. I know that it is the DWP, via UC, that is doing this and not HMRC, but it is still one Government department (DWP) that is effectively reducing earnings below the NMW.

Dazed_and_confused

The "emergency" tax code allows you to earn exactly the same amount before tax is deducted as the standard Personal Allowance only tax code does.

They are in fact the exact same tax code, currently 1185L

The only difference is that a non cumulative basis is used when the tax code is being operated on an emergency basis.

"Additional" tax isn't deducted because of the emergency tax code but it does prevent the normal cumulative basis from being used so a refund from a previous job cannot be made by a new employer.

And on some occasions where wages fluctuate a refund due for the current employer may not be made immediately via the wages. But that isn't because "additional" tax was deducted in the first place.

mineral68

They are not the same tax code. Ordinary tax code is 1185 L, whereas emergency tax codes are 1185W, 1185M or 1185X.

mineral68

I've now just spoken to an adviser on the UC helpline and he stated that an assessment period starts on the date of the new claim/entitlement. Therefore if you completely close a UC claim and then make a fresh claim one week later the assessment period begins at the start of the new claim and not at the end of the old claim. This means that I could avoid losing an income tax refund.

calcotti

mineral68 wrote: »

I've now just spoken to an adviser on the UC helpline and he stated that an assessment period starts on the date of the new claim/entitlement. Therefore if you completely close a UC claim and then make a fresh claim one week later the assessment period begins at the start of the new claim and not at the end of the old claim. This means that I could avoid losing an income tax refund.

If you do this would be very helpful if you can come back and let us know how you get on.

Icequeen99

mineral68 wrote: »

I've now just spoken to an adviser on the UC helpline and he stated that an assessment period starts on the date of the new claim/entitlement. Therefore if you completely close a UC claim and then make a fresh claim one week later the assessment period begins at the start of the new claim and not at the end of the old claim. This means that I could avoid losing an income tax refund.

That isn't what the Regulations say - see https://www.legislation.gov.uk/uksi/2013/376/pdfs/uksi_20130376_310518_en.pdf Regulation 21 3C which says that if you claim again within 6 months your assessment period date is the same as the old one.

I would double check that before closing a claim.

IQ

calcotti

Icequeen99 wrote: »

That isn't what the Regulations say - see https://www.legislation.gov.uk/uksi/2013/376/pdfs/uksi_20130376_310518_en.pdf Regulation 21 3C which says that if you claim again within 6 months your assessment period date is the same as the old one. IQ

That’s what I have previously advised before this thread got side tracked by a discussion about UC.

Ringing again to see if OP gets same answer from DWP is a good idea.

mineral68

'If you claim before six months your assessment period is the same as the last one.'
This makes no sense. Lets say you previously claimed 1st January 2018 and then closed your claim on 15 May 2018. If you then made a fresh claim on 16 May 2018, then why would your assessment period be again from 1st January 2018 to 1st February 2018? Why would it not be from the date of the new entitlement of 16 May 2018 to 16 June 2018?