Tax refunds and universal credit

Ajc1986

Not sure if there is a thread for this, could not find one? Only the odd comment through out an old tax refund thread, so I thought I would start a new one, as I expect this will be affecting alot of people considering the time of year.
Will a repayment for overpaid tax affect your universal credit? The answer seems to be yes. But I keep finding comments and such shading a grey area of the self assessment side of a refund.

My question is for the self assessment refund side, will hmrc inform dwp/uc? If so how quickly will they inform them. Is it instant?

 Do I need to inform them if hmrc have? 

Here is an example for you to ponder on. It's my own circumstance. 

Claimant on universal credit about to receive self employment tax refund from 19/20 tax year.

Uc assessment month is between 24/03/20 - 23/04/20

Sa refund submitted 6/4/20 and repayment issued for 20/04/20

The payment is due 3 days before the end of current assessment period for Uc. Will I miss the payment or is it to close? 

I don't understand why money from a previous year that has been owed to me since the previous year should affect any money I am entitled to now. I know they changed it from capital to income.. But still.

Anyone else here in the same predicament about to get a refund that will affect there uc claim? 

calcotti

Ajc1986 said: I don't understand why money from a previous year that has been owed to me since the previous year should affect any money I am entitled to now. I know they changed it from capital to income.. But still.

I agree that it’s unfair but that is the way the government have written the rules. If you receive a tax refund it will be taken into account as earned income for the UC assessment period in which it is received. I don’t know if it is reported by HMRC to DWP and I would suggest posting a note in the UC journal about it. There are some posters on this forum who work for DWP who may know.

Ajc1986

calcotti said:

Ajc1986 said: I don't understand why money from a previous year that has been owed to me since the previous year should affect any money I am entitled to now. I know they changed it from capital to income.. But still.

I agree that it’s unfair but that is the way the government have written the rules. If you receive a tax refund it will be taken into account as earned income for the UC assessment period in which it is received. I don’t know if it is reported by HMRC to DWP and I would suggest posting a note in the UC journal about it. There are some posters on this forum who work for DWP who may know.

Thank you. 
Hopefully someone comments. 

JessicaF_2

calcotti said:

Ajc1986 said: I don't understand why money from a previous year that has been owed to me since the previous year should affect any money I am entitled to now. I know they changed it from capital to income.. But still.

I agree that it’s unfair but that is the way the government have written the rules. If you receive a tax refund it will be taken into account as earned income for the UC assessment period in which it is received. I don’t know if it is reported by HMRC to DWP and I would suggest posting a note in the UC journal about it. There are some posters on this forum who work for DWP who may know.

As calcotti says it is taken into account if it relates to a tax year in which you were in paid work. You need to inform DWP, the info isn't sent to DWP by HMRC 

Ajc1986

JessicaF_2 said:

calcotti said:

Ajc1986 said: I don't understand why money from a previous year that has been owed to me since the previous year should affect any money I am entitled to now. I know they changed it from capital to income.. But still.

I agree that it’s unfair but that is the way the government have written the rules. If you receive a tax refund it will be taken into account as earned income for the UC assessment period in which it is received. I don’t know if it is reported by HMRC to DWP and I would suggest posting a note in the UC journal about it. There are some posters on this forum who work for DWP who may know.

As calcotti says it is taken into account if it relates to a tax year in which you were in paid work. You need to inform DWP, the info isn't sent to DWP by HMRC 

Thank you. Now if the refund was paye would that mean that hmrc would update the dwp?

JessicaF_2

Ajc1986 said:

JessicaF_2 said:

calcotti said:

Ajc1986 said: I don't understand why money from a previous year that has been owed to me since the previous year should affect any money I am entitled to now. I know they changed it from capital to income.. But still.

I agree that it’s unfair but that is the way the government have written the rules. If you receive a tax refund it will be taken into account as earned income for the UC assessment period in which it is received. I don’t know if it is reported by HMRC to DWP and I would suggest posting a note in the UC journal about it. There are some posters on this forum who work for DWP who may know.

As calcotti says it is taken into account if it relates to a tax year in which you were in paid work. You need to inform DWP, the info isn't sent to DWP by HMRC 

Thank you. Now if the refund was paye would that mean that hmrc would update the dwp?

If it was paid to you via an adjustment to your tax code, then it would feed through RTI earnings, but if not then it would need to be reported to DWP in the same way 

Ajc1986

JessicaF_2 said:

Ajc1986 said:

JessicaF_2 said:

calcotti said:

Ajc1986 said: I don't understand why money from a previous year that has been owed to me since the previous year should affect any money I am entitled to now. I know they changed it from capital to income.. But still.

I agree that it’s unfair but that is the way the government have written the rules. If you receive a tax refund it will be taken into account as earned income for the UC assessment period in which it is received. I don’t know if it is reported by HMRC to DWP and I would suggest posting a note in the UC journal about it. There are some posters on this forum who work for DWP who may know.

As calcotti says it is taken into account if it relates to a tax year in which you were in paid work. You need to inform DWP, the info isn't sent to DWP by HMRC 

Thank you. Now if the refund was paye would that mean that hmrc would update the dwp?

If it was paid to you via an adjustment to your tax code, then it would feed through RTI earnings, but if not then it would need to be reported to DWP in the same way 

What would class as an adjustment Tony tax code? I just did a plain old simple self assessment tax refund. Thank you

Dazed_and_C0nfused

You cannot get a tax refund for one year, say 2019:20, via an adjustment to your tax code in a different tax year, say 2020:21.

A PAYE tax code adjustment is to ensure the correct tax for the current tax year is paid/refunded.

just_trying

Yes, it'll need declared just like paye once you've deducted everything. Payee have it deducted why not you, if they have a refund.