Tax Rebate

Manc_1978

Hi guys. Hope everyone is well. I've got a question which I've contacted Universal Credit about and none of them knnew the answer. Me and my partner currently have a joint UC claim. She works I don't. I've just received a tax rebate from last year and was wondering how they'll work out what to take. We receive around £215-£220 p/m universal credit. We're wondering if they'll just not pay us for one month then we'll receive a full payment the month later or will they take a full month off us then the rest the next month. We've contacted UC 5 times and none of them knew what would happen. The tax rebate is for £413. Thanks for your help 

Robbie64

As far as I am aware, it has to be reported and will affect your UC for the assessment period in which it is paid. This is regardless of what tax year the refund relates to. It's simply classed as income.

Spoonie_Turtle

If it relates to a tax year you were in work (at any point, I assume, not necessarily the whole year) they will treat it as income and deduct 63%, so about £260 by my calculation which would mean no UC for the assessment period you receive it.  It won't affect the following month's payment.

I don't know how UC don't know the answer, it seems pretty straightforward to me!

calcotti

Manc_1978 said:

.. I've contacted Universal Credit about and none of them knnew the answer. 

Very badly trained in that case. It is clearly set out in they own guidance which, even if nthe t familiar with it, they should know they can refer to.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/935544/admh3.pdf#page9

H3022 An actual repayment to the claimant of

1. income tax or

2. NI contributions

by HMRC in respect of a tax year in which a person was in paid work is treated as employed earnings. Where the paid work was from carrying on a trade, profession or vocation then the repayment is treated as S/E earnings (see ADM H4131).

Note 1: Repayments of income tax may include tax relating to other sources such as unearned income. As long as the claimant was in paid work in the tax year the repayment relates to, then the whole repayment is treated as earnings.

Note 2: There is no requirement for the claimant to report changes that take place in relation to their tax code or variations in their tax reported via RTI.

Example

Ellie receives a cheque from HMRC for £200. This relates to an overpayment of £600 income tax made in the tax year 11/12 (in which Ellie was in paid work) and an underpayment of £400 in income tax relating to the tax year 12/13. The amount that Ellie should declare as employed earnings is £200 as this is the repayment she received, not £600 which relates to the refund due in one of those years.

All as described by spoonie.

You should report the tax rebate through your journal.

Manc_1978

Robbie64 said:

As far as I am aware, it has to be reported and will affect your UC for the assessment period in which it is paid. This is regardless of what tax year the refund relates to. It's simply classed as income.

Thank you mate

Manc_1978

Spoonie_Turtle said:

If it relates to a tax year you were in work (at any point, I assume, not necessarily the whole year) they will treat it as income and deduct 63%, so about £260 by my calculation which would mean no UC for the assessment period you receive it.  It won't affect the following month's payment.

I don't know how UC don't know the answer, it seems pretty straightforward to me!

Thank you. We actually thought that's the way it worked. 

Manc_1978

Manc_1978 said:

Spoonie_Turtle said:

If it relates to a tax year you were in work (at any point, I assume, not necessarily the whole year) they will treat it as income and deduct 63%, so about £260 by my calculation which would mean no UC for the assessment period you receive it.  It won't affect the following month's payment.

I don't know how UC don't know the answer, it seems pretty straightforward to me!

Thank you. We actually thought that's the way it worked. 

Thank you. It is how we figured it was. I rang them 3/4 times and one girl literally had no idea. She seemed very nervous about giving us an answer. I added it to my journal. Thank you for your reply