Migration to UC - In-year finalisation questions

v1ckyt

Hi there, 

We are due to migrate over to UC in the next 4 ish weeks. I understand when we hit the submit button on the UC claim, it will end our Tax Credits claim on that day, and trigger an in- year finalisation process.

Is this done quickly enough to be used for the calculation of transitional protection, if any is due, or does that happen later and get back dated?

Recently, we have paid into a pension for husband each month, just £240 per month, as he is medically retired and has no earned income, (so annually the £2880 maximum he can contribute).

If we make our usual £240 monthly payment into his pension during the period between 06.04.2024 and the date our tax credits claim ends, will tax credits take into account the pension contribution as part of the in-year finalisation figures, or will it be ignored?

Many thanks in advance for any advice.

the_pink_panther_2

Hi,

I suspect that it does count but I don't know 100% and I also don't know how readily they accept your word for this.  I have made contributions to a private pension this tax year and am also about to transfer over, although I think my contributions do count, I'm inclined not to include this deduction, especially after reading about the guy who lost his house over ticking an incorrect box (carer's allowance I think), I'm just too scared to make a mistake so I think I'll just not claim mine as I don't think I'd cope with the stress if I made a mistake or something went wrong.

huckster

Sorry but don't you have input into the in year finalisation process so you can ensure correct ?

https://www.litrg.org.uk/benefits/moving-universal-credit/ending-tax-credits#:~:text=In-year finalisation will be,deadline date on the notice.

v1ckyt

huckster said:

Sorry but don't you have input into the in year finalisation process so you can ensure correct ?

https://www.litrg.org.uk/benefits/moving-universal-credit/ending-tax-credits#:~:text=In-year finalisation will be,deadline date on the notice.

Thanks Huckster. 

I followed that link and a few it led on to and ended up here. 

https://revenuebenefits.org.uk/universal-credit/guidance/existing-tax-credit-claimants/finalising-tax-credit-claims/

The Household income section is really useful, confirming that pension contributions paid during the part year are taken into account, and the £300 disregard from other income can be deducted in full, and not pro rata so that is really useful info. 

Does anyone have any experience of how quickly the in-year finalisation process can be completed? In time for the first UC payment or later and backdated? 

spaniel101

In my recent experience, in-year finalization is received after approx 2/3 weeks of TC ending.  You check the income information they held up to the TC end date, fill in the form (I also sent my private pension statement back with this), post it back, then approx another month or so before they send you 'final notification' of any owed/due.   Its a relatively slow 'process' and unfortunately there's no way to rush how they do this.  

I was due to move over by end November, but, the timing was all wrong for my finances, so I just didn't apply for UC until mid January when it suited me much better.   UC did send me a 'reminder' in December (so effectively given another month) but I still waited until after christmas (I received in-year finalization check mid December).   After sending the forms back, I then received the 'official' finalization early/mid January.   When I received my first UC statement in February, I had transitional protection added.   Fortunately I owe a relatively small amount, of which I am still awaiting for it to land with UC (automatically goes to uc debt management) so I can pay it off in one go / or they will begin to deduct from your UC award after approx 3 months.

I have equally heard a number of people receiving their first UC statement, with no transitional protection on, when it is definately due.   I believe generally some are then sorted by their 2nd statement, or you can certainly query it on your journal if not received and believe you are entitled to it (the calculation for transitional protection is quite complicated but im sure the good folks on here will be able to guide you if you believe its incorrect).


Also just for information, UC won't be interested in your husband's private pension contribution going forward given that he doesn't have any 'earned income' as such for it to be deducted from, however you are still entitled to pay into it if you wish of course.

the_pink_panther_2

huckster said:

Sorry but don't you have input into the in year finalisation process so you can ensure correct ?

https://www.litrg.org.uk/benefits/moving-universal-credit/ending-tax-credits#:~:text=In-year finalisation will be,deadline date on the notice.

Thank you.  Yes, my worry is that as it's a private pension payment, they would just see that my net figure is lower than that HMRC say is my earnings and they would want me to evidence how come the figure I quote is lower (ie, income minus pension as they would just see the income one).  Of course I can send them printouts of pension /bank statements to confirm the payment is genuine, but I get stressed easily and worry that I wouldn't cope with that kind of stress as maybe the investigations are intimidating, so I think for my mental health I'd just not factor in my pension contribution, however much it's frustrating to not include it. 

the_pink_panther_2

spaniel101 said:

In my recent experience, in-year finalization is received after approx 2/3 weeks of TC ending.  You check the income information they held up to the TC end date, fill in the form (I also sent my private pension statement back with this), post it back, then approx another month or so before they send you 'final notification' of any owed/due.   Its a relatively slow 'process' and unfortunately there's no way to rush how they do this.  

I was due to move over by end November, but, the timing was all wrong for my finances, so I just didn't apply for UC until mid January when it suited me much better.   UC did send me a 'reminder' in December (so effectively given another month) but I still waited until after christmas (I received in-year finalization check mid December).   After sending the forms back, I then received the 'official' finalization early/mid January.   When I received my first UC statement in February, I had transitional protection added.   Fortunately I owe a relatively small amount, of which I am still awaiting for it to land with UC (automatically goes to uc debt management) so I can pay it off in one go / or they will begin to deduct from your UC award after approx 3 months.

I have equally heard a number of people receiving their first UC statement, with no transitional protection on, when it is definately due.   I believe generally some are then sorted by their 2nd statement, or you can certainly query it on your journal if not received and believe you are entitled to it (the calculation for transitional protection is quite complicated but im sure the good folks on here will be able to guide you if you believe its incorrect).


Also just for information, UC won't be interested in your husband's private pension contribution going forward given that he doesn't have any 'earned income' as such for it to be deducted from, however you are still entitled to pay into it if you wish of course.

Thanks, that's really useful to know.  I'd happily supply my private pension contribution letter etc as evidence at the same time as finalisation.  Did they request that you did this, or did you just send it? I'd assumed that this finalisation was just scanned by a computer so even if it's sent it then it would have been overlooked.  Is your income self employed or employed? I worried in part that as I'm employed they wouldn't expect to see a private pension contribution which is partly why I worry.

spaniel101

Employed and no, they don't know about your private pension contributions unless you tell them (and deduct the relevant gross contribution from your paye earnings they hold on the finalization form), they won't be asking you about it, you must inform them to disregard it from earnings information held.   I have always taken a pro-active approach to it and each year have always sent my pension statement in (even with normal annual review).   

I telephoned my final income in (from P60 then private pension contribution total deducted by me) just as TC were approaching the end and also wrote a letter, attaching the pension contribution statement, then also enclosed it again with the in-year finalization posted back (recorded/signed for) for peace of mind and clarity.

No need to worry, honestly it just a process to establish your final entitlement, just takes time (TC are very used to people having private pension contributions post-tax outside of paye but obviously they won't know about them, until you enlighten them).

the_pink_panther_2

spaniel101 said:

Employed and no, they don't know about your private pension contributions unless you tell them (and deduct the relevant gross contribution from your paye earnings they hold on the finalization form), they won't be asking you about it, you must inform them to disregard it from earnings information held.   I have always taken a pro-active approach to it and each year have always sent my pension statement in (even with normal annual review).   

I telephoned my final income in (from P60 then private pension contribution total deducted by me) just as TC were approaching the end and also wrote a letter, attaching the pension contribution statement, then also enclosed it again with the in-year finalization posted back (recorded/signed for) for peace of mind and clarity.

No need to worry, honestly it just a process to establish your final entitlement, just takes time (TC are very used to people having private pension contributions post-tax outside of paye but obviously they won't know about them, until you enlighten them).

Thank you @spaniel101 , that's really useful.  

so in essence, I can phone my total over to them and see if they can leave a note on my file saying that I will be posting evidence imminently, then post the pension statement?  I was worried of having a proper investigation (or whatever they are called) if I did that and worried I wouldn't cope with the stress of it all.

v1ckyt

spaniel101 said:

In my recent experience, in-year finalization is received after approx 2/3 weeks of TC ending.  You check the income information they held up to the TC end date, fill in the form (I also sent my private pension statement back with this), post it back, then approx another month or so before they send you 'final notification' of any owed/due.   Its a relatively slow 'process' and unfortunately there's no way to rush how they do this.  

I was due to move over by end November, but, the timing was all wrong for my finances, so I just didn't apply for UC until mid January when it suited me much better.   UC did send me a 'reminder' in December (so effectively given another month) but I still waited until after christmas (I received in-year finalization check mid December).   After sending the forms back, I then received the 'official' finalization early/mid January.   When I received my first UC statement in February, I had transitional protection added.   Fortunately I owe a relatively small amount, of which I am still awaiting for it to land with UC (automatically goes to uc debt management) so I can pay it off in one go / or they will begin to deduct from your UC award after approx 3 months.

I have equally heard a number of people receiving their first UC statement, with no transitional protection on, when it is definately due.   I believe generally some are then sorted by their 2nd statement, or you can certainly query it on your journal if not received and believe you are entitled to it (the calculation for transitional protection is quite complicated but im sure the good folks on here will be able to guide you if you believe its incorrect).


Also just for information, UC won't be interested in your husband's private pension contribution going forward given that he doesn't have any 'earned income' as such for it to be deducted from, however you are still entitled to pay into it if you wish of course.

Thanks Spaniel, that is really useful information 
I am aware that UC won't take husband's pension contributions into account going forward,  and we will continue to pay into it if we can afford it.
I guess I will just have all the paperwork and statements lined up and ready to submit along with our in-year finalisation figures, and hope that it is a smooth process. 

Appreciate your help

spaniel101

the_pink_panther_2 said:

spaniel101 said:

Employed and no, they don't know about your private pension contributions unless you tell them (and deduct the relevant gross contribution from your paye earnings they hold on the finalization form), they won't be asking you about it, you must inform them to disregard it from earnings information held.   I have always taken a pro-active approach to it and each year have always sent my pension statement in (even with normal annual review).   

I telephoned my final income in (from P60 then private pension contribution total deducted by me) just as TC were approaching the end and also wrote a letter, attaching the pension contribution statement, then also enclosed it again with the in-year finalization posted back (recorded/signed for) for peace of mind and clarity.

No need to worry, honestly it just a process to establish your final entitlement, just takes time (TC are very used to people having private pension contributions post-tax outside of paye but obviously they won't know about them, until you enlighten them).

Thank you @spaniel101 , that's really useful.  

so in essence, I can phone my total over to them and see if they can leave a note on my file saying that I will be posting evidence imminently, then post the pension statement?  I was worried of having a proper investigation (or whatever they are called) if I did that and worried I wouldn't cope with the stress of it all.

Yes by all means, when you have had your last wage before moving over, you can do the calculation (Gross Taxable Pay to date minus Gross Private Pension Contributions) and let them know your final income figure, informing them you also make these private pension contributions from your post-tax wage (so they know where your figure has come from).    When you receive the in-year finalization form to check and send back, just make sure their figure matches up with your calculation (and include pension statement).

They really won't for this very small standard matter, but i never fear any 'investigation' of any type, given that I am always very happy to provide the Evidence (and that is all that is needed from their point of view!).