ESA letter about tax 28 August 2022 at 9:36PM in Benefits & tax credits 14 replies 391 views

Nira123

Hi, 

On UC and recently been seared LCWRA support group. Got back payments. 

Got a letter in yesterday saying:

Tax year 2021/22

Total allowance paid £2258.82

Taxable allowance £2258.82

But worried and don’t know what it means. Can someone clarify please?

JGB1955

You received £2258.52 and it's all taxable.  Unless you exceed your tax free allowance of £12,570, no need to worry - the first £12,570 is taxed at 0%.

Nira123

Thanks. So I don’t owe them any money back, which was my worry?

Alice_Holt

Some benefits (such as nsESA) are classed as taxable income.
https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits

Your personal income tax allowance is £12,570. 
If your taxable income for 2021/22 was below this figure, there is no tax due.
https://www.gov.uk/income-tax-rates

What other taxable earnings did you have in the 2021/22 tax year?

Alice_Holt

Nira123 said:

Thanks. So I don’t owe them any money back, which was my worry?

        No you don't owe DWP money back.

       If the £2258.82 takes your total taxable income above £12,570 for 20/21 - then you may owe HMRC income tax.

Dazed_and_C0nfused

If you have applied for Marriage Allowance then your Personal Allowance will be reduced to £11,310 rather than £12,570 but you would need to have another £9k+ of taxable income in the 2021:22 tax year to actually have any tax to pay.

If any tax is owed it would be payable to HMRC not DWP.

tifo

Nira123 said:

Hi, 

On UC and recently been seared LCWRA support group. Got back payments. 

Got a letter in yesterday saying:

Tax year 2021/22

Total allowance paid £2258.82

Taxable allowance £2258.82

But worried and don’t know what it means. Can someone clarify please?

Does this mean LCWRA element is taxable?

Contribution based ESA is taxable.

Alice_Holt

tifo said:

Nira123 said:

Hi, 

On UC and recently been seared LCWRA support group. Got back payments. 

Got a letter in yesterday saying:

Tax year 2021/22

Total allowance paid £2258.82

Taxable allowance £2258.82

But worried and don’t know what it means. Can someone clarify please?

Does this mean LCWRA element is taxable?

    Look at the link I posted on the 28th @ 9.49, that will give you the answer

poppy12345

tifo said:

Nira123 said:

Hi, 

On UC and recently been seared LCWRA support group. Got back payments. 

Got a letter in yesterday saying:

Tax year 2021/22

Total allowance paid £2258.82

Taxable allowance £2258.82

But worried and don’t know what it means. Can someone clarify please?

Does this mean LCWRA element is taxable?

Contribution based ESA is taxable.

LCWRA is part of UC, UC is means tested and not taxable. New Style ESA which is what the OP is claiming as well is taxable. All information provided in the link above.

tifo

poppy12345 said:

LCWRA is part of UC, UC is means tested and not taxable. New Style ESA which is what the OP is claiming as well is taxable. All information provided in the link above.

Oh, OK, thanks, the OP said "On UC and recently been seared LCWRA support group. Got back payments .... Taxable allowance £2258.82". There was no mention of ESA on here. So them being on ESA must be from another thread.

Spoonie_Turtle

tifo said:

poppy12345 said:

LCWRA is part of UC, UC is means tested and not taxable. New Style ESA which is what the OP is claiming as well is taxable. All information provided in the link above.

Oh, OK, thanks, the OP said "On UC and recently been seared LCWRA support group. Got back payments .... Taxable allowance £2258.82". There was no mention of ESA on here. So them being on ESA must be from another thread.

The title says they got a letter from ESA