Universal credit and NT tax code bankruptcy 28 September 2020 at 1:13PM in Bankruptcy & living with it 10 replies 229 views

stepha4

My husbands tax code has changed this month and now the tax he is not paying we have to pay to the insolvency service each month as part of the bankruptcy. I’m really frightened that it’ll look to UC like he’s making more money and our UC will be stopped? I’ve asked our case worker at the insolvency service but she wasn’t sure! 

Does anyone know? Thanks

bradders1983

Surely the UC people will only know you are being paid more after tax if you actually tell them?

stepha4

bradders1983 said:

Surely the UC people will only know you are being paid more after tax if you actually tell them?

I don’t believe so? My husbands post tax/NI wage shows on our payment each month. It changes by a few pence each month so I was thinking it might suddenly show a massive increase one month and completely knock out our payment. 

bradders1983

Yes but the DWP dont have access to your wageslips (or your bank statements) unless you actually show them to them, thats the point.   My understanding was that you have to tell them about a change of circumstances but given the extra money he is being paid each month isnt actually a change of circumstances because it is not his money, then you will be fine.

Obviously if you are asked to show them to the DWP the no-tax code can be explained.

stepha4

bradders1983 said:

Yes but the DWP dont have access to your wageslips (or your bank statements) unless you actually show them to them, thats the point.   My understanding was that you have to tell them about a change of circumstances but given the extra money he is being paid each month isnt actually a change of circumstances because it is not his money, then you will be fine.

Obviously if you are asked to show them to the DWP the no-tax code can be explained.

Ok, I was under the impression that they could see his earnings each month. When I log in to our UC account online, under the payment tab it says ‘earnings reported by employer’ and has what he’s paid each month, this goes up and down each month by a few pounds so I had assumed that the DWP were getting this monthly from my husbands employer but maybe not. 

I’ll keep my fingers crossed that it won’t mess the whole thing up as we’re just getting back on our feet. Thanks

george_112

UC get this info from HMRC RTI system that your employer reports all pay details to. They don’t actually see the tax code just gross and take home pay I believe. You might be best contacting UC 

bradders1983

I see. Didnt realise they had access to that level of info. Oops.

george_112

Yes, it feeds in automatically, same with housing benefit and council tax reduction benefit. Every time I receive slightly more wages it generates a new calculation and reduces my housing benefit due to HMRC RTI but it never seems to work the other way when my wages are lower! 

Minkym00

If it affects your Universal Credit then your OR can write off the NT tax payments. You’re only required to make the payments if you will otherwise benefit from them.

stepha4

Minkym00 said:

If it affects your Universal Credit then your OR can write off the NT tax payments. You’re only required to make the payments if you will otherwise benefit from them.

Thankyou so much!

sourcrates

bradders1983 said:

I see. Didnt realise they had access to that level of info. Oops.

Everything is in your online tax account nowadays, your income, any benefits you receive, tax credits, state pension, NI, everything.