WTC Migration To UC First Payment

the_pink_panther_2

@Yamor I was hoping to ask you (hopefully) one last question about TP.  For the TC side of things, if I get paid 22nd of the month on a monthly basis (pay to cover employment from 1st month until the end of the month), then on 21st of this month I'd have had zero income for this tax year (6th-21st) as I wouldn't have been paid yet, so claiming UC on 21st, TC would think my annual earnings were £0 as there wouldn't have been any payment received at that point for the current tax year, giving a high TP I expect, but on 22nd of month, although my monthly pay is for a month's work, as it's only about half the month in, then if I were to claim that day later, if TC considered the at face value daily rate, it looks like I got the pay for about half a month's work, so scaled up to an annual figure it will look like I get paid approx. double what I actually do get paid, in which case TP would be zero... and many in that situation likely wouldn't be entitled to TC at those skewed rates giving disproportionately high earnings when scaled up (although this sounds illogical because it would mean that many people transitioning this month would end up having to pay back their TC payments in full for this reason and others would have TP based on £0 annual earnings) .  I have to transition this month and want my pay to reflect my true monthly pay and I'm wondering whether that is possible.  If TC realise that this is a monthly pay and simply just scale my monthly pay up x 12 to get an annual figure then great, but it's just occurred to me this may not be the case as there are multiple ways of calculating this. .   Or maybe I am allowed to ask UC for a short extension to claiming, until 5th May so that at that point the monthly earnings can be representative of my monthly earnings and when scaled, give a representative annual salary as it will cover exactly a month?

Yamor

the_pink_panther_2 said:

@Yamor I was hoping to ask you (hopefully) one last question about TP.  For the TC side of things, if I get paid 22nd of the month on a monthly basis (pay to cover employment from 1st month until the end of the month), then on 21st of this month I'd have had zero income for this tax year (6th-21st) as I wouldn't have been paid yet, so claiming UC on 21st, TC would think my annual earnings were £0 as there wouldn't have been any payment received at that point for the current tax year, giving a high TP I expect, but on 22nd of month, although my monthly pay is for a month's work, as it's only about half the month in, then if I were to claim that day later, if TC considered the at face value daily rate, it looks like I got the pay for about half a month's work, so scaled up to an annual figure it will look like I get paid approx. double what I actually do get paid, in which case TP would be zero... and many in that situation likely wouldn't be entitled to TC at those skewed rates giving disproportionately high earnings when scaled up (although this sounds illogical because it would mean that many people transitioning this month would end up having to pay back their TC payments in full for this reason and others would have TP based on £0 annual earnings) .  I have to transition this month and want my pay to reflect my true monthly pay and I'm wondering whether that is possible.  If TC realise that this is a monthly pay and simply just scale my monthly pay up x 12 to get an annual figure then great, but it's just occurred to me this may not be the case as there are multiple ways of calculating this. .   Or maybe I am allowed to ask UC for a short extension to claiming, until 5th May so that at that point the monthly earnings can be representative of my monthly earnings and when scaled, give a representative annual salary as it will cover exactly a month?

For the TP calculation, HMRC provide DWP with income (and entitlement) details as held by HMRC on "migration day", which is the day prior to your UC claim.
As such, it is irrelevant how your award is eventually finalised.
The question then is what income details HMRC will hold for you on migration day.
For a UC claim made in April, it will generally be one of four possibilities:
1. if 23/24 was based on actual 22/23 income, then they normally carry forward from 22/23 with a small uplift for inflation.
2. if 23/24 was based on an estimated 23/24 income, then that would simply be carried forward.
3. if you call up HMRC on or after 6th April 2024 and provided a new estimate for 24/25, then that would be the figure used.
4. if you haven't called up HMRC to provide an estimate for 24/25, then usually at some point in the second half of April, they update the award to be based on earnings information they have received through payroll submissions for 23/24 (rather than using option 1 or 2 above).

Although you should note that had HMRC passed on income of £0, that would normally mean your TP is lower than it would otherwise be, as the TP is calculated based on the amount of UC you would get at a similar level of earnings, compared to TCs. At an income of £0, the difference between TCs entitlement and the potential UC entitlement would normally be weighted in favour of UC, meaning lower TP.

the_pink_panther_2

@Yamor Thank you so much for that, that's amazingly helpful information.   

I did claim UC yesterday, before pay day deliberately, because I suddenly realised that I had a TC prescription exemption certificate, which I had already used in this tax year.  My annual true income is below the allowable threshold for the exemption so I am eligible on that count, but I retrospectively worried that I could be fined £100 for misuse if claimed after pay day because their HMRC estimate when spread over the tax year would appear that I had higher income and I was scared of the fine as it may then think I was ineligible based on a distorted estimate of income due to time of change over.

I had however logged my new estimate of income (which should be very accurate) on the tax credits section of government gateway portal a few days ago, within this new tax year, I assume this is as good as a phone call?  I think it takes a few days for payments to reflect the change so the payment wasn't yet reflecting this updated income figure at the point I claimed (so perhaps this is a problem?), but the government gateway portal was now saying the correct income figure, so I'm hoping that they will go with the exact amount which which I had input on the Government Gateway Portal, and all will work to be representative of the true figure.