Tax credits to UC - in year finalisation

mummy_2_be

Hi I hope someone can help, i am in the process of a managed migration from tc for UC. My claim ended on 24.04, I have had a letter saying I owe 192.15, based on 1 payment of Ctc of £281.86 with my wages for 06.04.24 -28.04.24 being £1970 (this is correct but for a whole months wages ) I  have called to query and was told that the way they calculate wages and because of the date I am paid they have worked out my income to be £28000 rather than the £23600 that it is ?! How can I dispute this as what I was paid should be correct for my income but they have grossed it up in a way that makes it look more and they also have used wages  for a month rather than the the 22 days.

Yamor

This is how it is supposed to work, and there are winners and losers. You happen to be a loser, unfortunately.

michaels

So they take a while month wages (even though it wasn't paid during the tc period), assume it covers part of a month, and gross it up to an annual income on that basis?! Madness

Yamor

michaels said:

So they take a while month wages (even though it wasn't paid during the tc period), assume it covers part of a month, and gross it up to an annual income on that basis?! Madness

No, only if it was paid during the award period. The OP must be paid some time in the middle of the month.

mummy_2_be

Thank you for your replies. My salary paid date is 28th (in April this was the 26th as it fell on a Sunday) and I applied for UC on the 30th as per my migration notice. Does it mean I cannot appeal or get them to look again at this?

Yamor

mummy_2_be said:

Thank you for your replies. My salary paid date is 28th (in April this was the 26th as it fell on a Sunday) and I applied for UC on the 30th as per my migration notice. Does it mean I cannot appeal or get them to look again at this?

This issue has been heard by the Upper Tribunal already, and the government won.

https://www.gov.uk/administrative-appeals-tribunal-decisions/his-majestys-revenue-and-customs-v-as-tc-2023-ukut-67-aac

michaels

mummy_2_be said:

Thank you for your replies. My salary paid date is 28th (in April this was the 26th as it fell on a Sunday) and I applied for UC on the 30th as per my migration notice. Does it mean I cannot appeal or get them to look again at this?

So the finalisation will actually cover the period to 30th April during which the OP was paid but the income will be taken to cover the period from 6 April to 30th April hence giving a higher assessed income?  If they had done the migration on the 27th April they would have been assessed with zero income for the period 6th April - 27th April?!

Presumably there is both a payment for the 6 - 24 and 24 - 30?

Yamor

michaels said:

mummy_2_be said:

Thank you for your replies. My salary paid date is 28th (in April this was the 26th as it fell on a Sunday) and I applied for UC on the 30th as per my migration notice. Does it mean I cannot appeal or get them to look again at this?

So the finalisation will actually cover the period to 30th April during which the OP was paid but the income will be taken to cover the period from 6 April to 30th April hence giving a higher assessed income?  If they had done the migration on the 27th April they would have been assessed with zero income for the period 6th April - 27th April?!

Presumably there is both a payment for the 6 - 24 and 24 - 30?

To be slightly pedantic:

If the UC claim was made on 30th April, then the TC award period would be 6th April to 29th April, and any income RECEIVED in that period would count for that period (even if the wages were paid for a full month). So the month's wages in that case would be divided by 24 and multiplied by 365 to get to an annual figure.

If the UC claim was made on the day the wages were paid*, or earlier, then the award would be assessed on zero income.

I don't know what you mean in your last sentence.

* The OP says her wages in April were paid on the 26th, but they are normally paid on the 28th. If the employer followed HMRC guidance, then they would still have put a paydate of the 28th on the payroll submission, in which case the UC claim could have been made as late as the 28th. However, if they put a paydate of the 26th, then the UC claim would've had to have been made by the 26th at the latest.

michaels

The OP mentions a TC period of 6 - 24 April and a UC claim starting on the 30th April hence thinking there might be 2 TC payment periods, the second covering the 25th-29th.

I guess the other option is the OP did not take advantage of migration and actually had a gap between TC ending and claiming UC?

Yamor

I assumed the OP had just mistyped.

It can't be that there was a gap between the TC claim ending and the UC claim, because then TCs are only supposed to include income until the end of the TC claim, not until the start of the UC claim.

michaels

Yamor said:

I assumed the OP had just mistyped.

It can't be that there was a gap between the TC claim ending and the UC claim, because then TCs are only supposed to include income until the end of the TC claim, not until the start of the UC claim.

Now there is a thought.  Only claim TC up to the day before pay day and then claim UC from the day after pay day....