Owe Tax for undeclared savings

JoeCox

Looking for some help on an issue that's causing serious stress to a pensioner.

Her husband passed away in 2015, and she was paid just over £16k from his pension pot. She held this money in a bank account before paying off some bills, and it was not long (a few months) before a few thousand pounds had been spent.

At the time, due to the stress of his passing etc, she had not declared this money to the council. They have now got in touch stating that, after a review, she was paid housing benefit she was not entitled to, as she passed the 16k threshold (by a few hundred pounds). They are asking for 8K to cover 2015 to the present day, starting with missing 2018 payments which they expect paid in 14 days.

Unfortunately, the money she had is now gone (it was spent trying to help a sibling through a rough patch), and she does not have the money to pay off this debt. The biggest concern is that she is at risk of losing her council flat. She realises this is her error, but has never tried avoiding paying her taxes and would have willingly paid them had she known at the time.

She intends on going to the council to discuss the situation, but I am looking for any information as to what options she has? This situation is having a serious effect on her physical and mental condition.

Thanks.

KatrinaWaves

It is not 'tax' she owes. she has not avoided paying tax, she has claimed benefits whilst over the allowed limits so has technically fraudulently claimed benefits, its nothing to do with tax.

Pensioners are allowed 10k in savings before deductions are made, and it stops entirely at 16k. This is made very clear in all correspondence and applications, as well as telling people to make sure they report any changes in their financial circumstances.

She needs to go to the council and arrange a payment plan, most likely it will be recovered by reducing her current benefits.

TELLIT01

It would potentially be helpful if she can provide bank statements covering the entire period from the date she received the payment from her husband's pension. She may need to speak to her bank to obtain these, but they will be helpful in showing how, when and why the amount of money reduced. That will help define the actual amount of overpayment which will have to be repaid.

WillGoodfellow

As she has received a housing benefit overpayment, it is likely that she will have to start to pay it back. Her housing benefit will probably be reduced to repay it so she will have to make up any shortfall in rent from other income.


As long as her rent is paid, there is no reason that she will lose her council property because of a benefits overpayment.