taxing benefits

teedy23

My BIL died in June , having been Ill with MND for 2 years. He had been self employed for many years. In the 1st year of his illness he earned £10,000 before he had to give up. He went on to disability living allowance until he died. My sister has now recieved a bill for £2000, he had a smallish personal pension but the letter states he is being taxed on benefits and pension. Surely this cant be right, taxed on disability pension ! She just wants to pay it and be done with it, shes so tired of getting run around dealing with the estate.

Keep_pedalling

DLA is not taxable income. Presumably he was having to submit self assessment each year, was one filed for the last two years? 

hjd

Pensions are taxable, disability living allowance is not.  Your sister may need to check exactly what his income was, from what sources and what tax years they are looking at.

Savvy_Sue

in the absence of other information, HMRC will assume that his income remained stable from year to year. So if they weren't told that he'd ceased self-employment and gone onto DLA, that would explain it. 

Did he have an accountant? And may be worth a phone call to HMRC (try early morning) to ensure they know he has died.