UC & Tax rebate claim Question

Turtle_Powa

Hello,

I have received a tax rebate in the post this week for £1.1k regarding 2023/24 tax year and I am wondering if I have to claim it at this moment? or could there be any potential issues if I don't?. I believe I have 4 years to claim?

I'm hoping to get into full time work soon and would rather see the money in my pocket, and hold off for now claiming it. If I claim now, I will have too notify UC once I receive it into my bank and £600 is a fair chunk of change to lose out on an assessment period. 

I'm wondering what your thoughts are?

Cheers.

Dazed_and_C0nfused

Turtle_Powa said:

Hello,

I have received a tax rebate in the post this week for £1.1k regarding 2023/24 tax year and I am wondering if I have to claim it at this moment? or could there be any potential issues if I don't?. I believe I have 4 years to claim?

I'm hoping to get into full time work soon and would rather see the money in my pocket, and hold off for now claiming it. If I claim now, I will have too notify UC once I receive it into my bank and £600 is a fair chunk of change to lose out on an assessment period. 

I'm wondering what your thoughts are?

Cheers.

Do you mean you have received a cheque from HMRC?

Or do you mean something else?

Turtle_Powa

A letter that says for me to claim online with a p800 reference number. Sorry, I should've mentioned that. It would be then deposited into my bank.

Dazed_and_C0nfused

Turtle_Powa said:

A letter that says for me to claim online with a p800 reference number. Sorry, I should've mentioned that. It would be then deposited into my bank.

From HMRC's perspective they usually send you a cheque if you don't claim it.

But that seems to have changed in May this year.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye91037#nocontactbacsrepayment

You will no doubt be able to claim this refund later, maybe not after 5 April 2028 though.

But whether DWP would consider this some sort of deprivation I don't know, hopefully one of the DWP experts will be along to comment later.

Turtle_Powa

Dazed_and_C0nfused said:

Turtle_Powa said:

A letter that says for me to claim online with a p800 reference number. Sorry, I should've mentioned that. It would be then deposited into my bank.

From HMRC's perspective they usually send you a cheque if you don't claim it.

But that seems to have changed in May this year.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye91037#nocontactbacsrepayment

You will no doubt be able to claim this refund later, maybe not after 5 April 2028 though.

But whether DWP would consider this some sort of deprivation I don't know, hopefully one of the DWP experts will be along to comment later.

It's the deprivation part that worries me and would rather not have the issues as this was money I never expected.

Newcad

There seems to be a misunderstanding in what you have said (£600 deduction?)

Do you have any other savings/capital?

I believe (think) that this would be treated as capital not income so unless it takes you over £6,000 in savings/capital is not a problem.

Dazed_and_C0nfused

Newcad said:

There seems to be a misunderstanding in what you have said (£600 deduction?)

Do you have any other savings/capital?

I believe (think) that this would be treated as capital not income so unless it takes you over £6,000 in savings/capital is not a problem.

AIUI the tax refund is treated as earnings, not capital.

Turtle_Powa

It is earnings and no way around that fact.

The £600 is approximately what they'll take from my UC once they apply the 55p taper.

I do have savings but it will not take me over.

Spoonie_Turtle

Dazed_and_C0nfused said:

Newcad said:

There seems to be a misunderstanding in what you have said (£600 deduction?)

Do you have any other savings/capital?

I believe (think) that this would be treated as capital not income so unless it takes you over £6,000 in savings/capital is not a problem.

AIUI the tax refund is treated as earnings, not capital.

That's correct, if the refund relates to a tax year when the person was in employment.

(But if it doesn't, I still wouldn't bank on UC getting it right the first time.)

Turtle_Powa

Spoonie_Turtle said:

Dazed_and_C0nfused said:

Newcad said:

There seems to be a misunderstanding in what you have said (£600 deduction?)

Do you have any other savings/capital?

I believe (think) that this would be treated as capital not income so unless it takes you over £6,000 in savings/capital is not a problem.

AIUI the tax refund is treated as earnings, not capital.

That's correct, if the refund relates to a tax year when the person was in employment.

(But if it doesn't, I still wouldn't bank on UC getting it right the first time.)

I was in employment Until end of September 23.

Anyway, I've decided to do the refund 5 minutes ago and avoid any potential hassles. Once I receive it, I will notify UC that I received the payment through my journal.

Only hoping, I don't need to pay council tax because of income that through tax as I paid my council tax fully during the period I was working, but I'll cross that bridge when it comes. 

I think we can say this is resolved with me doing the refund.