Pension Credit & Savings

Mercedes55

My partner is waiting to have both of his knees replaced and as his workplace were not able to offer him alternative work, he's had no choice but to inform the company he works for that he can no longer work and leaves tomorrow. He is self employed, but has only worked for the one employer for the last 15yrs or so.

As he is 63 he does qualify for Pension Credits, but even if we manage to get PIPS too we still be a long way away from the income we have been used to.

The main thing that is bugging me at the moment is the fact that due to my other half having a Business Account with his tax money for 2015/2016 sitting in it, we will lose some of his Pension Credit as they see that money as savings, which I totally understand. We had assumed he would be able to just ask his accountant to sort out early payment of his tax, but it seems you aren't allowed to do that, which really doesn't make any sense at all to me :question:

mgdavid

if the accountant is professional he should have a separate Client Account for holding clients' money, and you could pay a decent sum e.g. 80% of the estimated tax to the accountant to hold until the tax return is completed and ready for payment to HMRC.
If the accountant cannot or will not do this, then find a better accountant.

ex-pat_scot

I have paid tax early to HMRC. I got some (not a lot, but some) interest credit for the time btween payment and due date. From memory the payment was c£20k so quite substantial.


Hence I'm not sure why you state that you can't early pay.
When is the company year end? (assuming he's running as a ltd co?)

jamesd

What is preventing him from submitting a tax return now with estimated amounts and immediately paying HMRC the estimated amount of income tax that is due?

jamesd

"We will ignore the value of your customer's assets in a business if they are the owner (or one of the owners) and they:
• do some work in that business
• are unable to work in the business because they are ill or disabled but plan to return as soon as they can
• no longer work in the business and are trying to sell or realise their assets – in which case we will ignore the assets for a reasonable period "

The money in the business account is a business asset should be disregarded.

"If your customer is a self-assessment taxpayer

Pension Credit takes account of net income less any tax payable, including any tax on your State Pension. If your customer is a self assessment tax payer they need to tell us how much income tax they will pay or expect to pay for the current tax year. We need to know this to ensure your customer is getting the correct amount of Pension Credit."

It appears that the calculation for him has ignored the fact that the money in the business account is to pay tax.

He should appeal based on the failure to disregard the business asset that is there to pay for the income tax. Though using the money to pay the income tax that is due first may be useful.

atush

If he is diabled and needs surgery, and his employer have refused to employ him in a job he can do now, has he looked to an employment solicitor?

Sounds like he needs some advice here. Did his employment cause his condition?

WillowCat

As he is below pension credit age he needs to also apply for ESA, which is the appropriate income replacement benefit. Assuming he has the correct NI contributions the money he gets will not be means tested except in relation to any pension payments he may be getting.

McKneff

atush wrote: »

If he is diabled and needs surgery, and his employer have refused to employ him in a job he can do now, has he looked to an employment solicitor?

Sounds like he needs some advice here. Did his employment cause his condition?

I am a bit confused because the OP says he is employed and mentions employer, then goes on to say he is self employed,

If he was actually employed why did he leave and not just go onto sick leave.
If he is sel employd
then if he has paid the correct NI he should be able to claim ESA

McKneff

Mercedes55 wrote: »

My partner is waiting to have both of his knees replaced and as his workplace were not able to offer him alternative work, he's had no choice but to inform the company he works for that he can no longer work and leaves tomorrow. He is self employed, but has only worked for the one employer for the last 15yrs or so.

As he is 63 he does qualify for Pension Credits, but even if we manage to get PIPS too we still be a long way away from the income we have been used to.

The main thing that is bugging me at the moment is the fact that due to my other half having a Business Account with his tax money for 2015/2016 sitting in it, we will lose some of his Pension Credit as they see that money as savings, which I totally understand. We had assumed he would be able to just ask his accountant to sort out early payment of his tax, but it seems you aren't allowed to do that, which really doesn't make any sense at all to me :question:

If he has been with the same company for 15 years then he is not self employed.
Do the company pay his tax, holiday pay, etc etc.

atush

McKneff wrote: »

I am a bit confused because the OP says he is employed and mentions employer, then goes on to say he is self employed,

If he was actually employed why did he leave and not just go onto sick leave.
If he is sel employd
then if he has paid the correct NI he should be able to claim ESA

Exactly, I am confused as to both employment status and if the job caused the problem?

xylophone

As he is below pension credit age

It seems that he is 63 so could apply for PC - the problem seems to lie in the amount of capital (tax due to HMRC) that he has sitting in an account.

Presumably the amount is substantial enough to fall foul of the "deemed income from capital" rules.

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS48_Pension_Credit_fcs.pdf?dtrk=true

However, see post 5.

With regard to his employment status

https://www.gov.uk/employment-status/worker

presumably HMRC have agreed that he is self employed?