Carer's Allowance and tax liability

daddydodo

My wife is 59, retired, and receives a private pension. This pension is just larger than the personal allowance for tax. So, she pays a small amount of tax every month, the pension is payed net. 

She is also a carer for her mother and receives carer's allowance every 4 weeks. We know this is a taxable benefit but this seems to be being payed gross without any tax taken off.

My question is, does she need to complete a self assessment form for HMRC, or will HMRC be clever enough to change her tax code at the end of the tax year?

Thanks for your help.

Dazed_and_C0nfused

daddydodo said:

My wife is 59, retired, and receives a private pension. This pension is just larger than the personal allowance for tax. So, she pays a small amount of tax every month, the pension is payed net. 

She is also a carer for her mother and receives carer's allowance every 4 weeks. We know this is a taxable benefit but this seems to be being payed gross without any tax taken off.

My question is, does she need to complete a self assessment form for HMRC, or will HMRC be clever enough to change her tax code at the end of the tax year?

Thanks for your help.

From what you've posted there is no reason for her to complete a tax return.

But she does need to notify HMRC about the Carer's Allowance income.

A letter confirming when it started and the amount received each tax year should be sufficient.  

They will then review any tax years that have ended and update her current tax code to incorporate the Carer's Allowance (DWP would never deduct tax from it).

daddydodo

Thanks for the reply, I know she'll owe some tax on the payments but we didn't want it to accumulate any further, and certainly wanted to avoid any fine by not completing a self assessment form.

Dazed_and_C0nfused

daddydodo said:

Thanks for the reply, I know she'll owe some tax on the payments but we didn't want it to accumulate any further, and certainly wanted to avoid any fine by not completing a self assessment form.

There should be no fine, interest or anything like that.

It might be she is asked to pay HMRC direct for previous tax years (via a Simple Assesment calculation letter) but would always get a minimum of 3 months from when the calculation is issued to pay whatever is due.

peteuk

Dazed_and_C0nfused said:

daddydodo said:

Thanks for the reply, I know she'll owe some tax on the payments but we didn't want it to accumulate any further, and certainly wanted to avoid any fine by not completing a self assessment form.

There should be no fine, interest or anything like that.

It might be she is asked to pay HMRC direct for previous tax years (via a Simple Assesment calculation letter) but would always get a minimum of 3 months from when the calculation is issued to pay whatever is due.

They can also lower her tax code so she pays it off over a tax year.  I asked for a years grace (turned out to be until the next tax year so wasn’t a full year)

loopylollypop

Could I just ask if anyone knows if you can claim back tax paid on carers through a tax return. I got carers allowance and then due to an annual pay increase it took me 30p over the limit!! They have now asked me to pay it all back. I’m paying it back at £20/month as that’s all I can afford now I’ve lost the carers allowance. I was taxed over £400 pound so don’t think it’s fair that I have to pay tax on something I’m paying back. I do a self assessment but not sure where to put it on the form. Also if I’ve only paid 200 back would I just put that on each year until it’s paid off to reduce my tax bill? Sorry for the long post, just hoping someone can help.

RobertTheBruce

peteuk said:

Dazed_and_C0nfused said:

daddydodo said:

Thanks for the reply, I know she'll owe some tax on the payments but we didn't want it to accumulate any further, and certainly wanted to avoid any fine by not completing a self assessment form.

There should be no fine, interest or anything like that.

It might be she is asked to pay HMRC direct for previous tax years (via a Simple Assesment calculation letter) but would always get a minimum of 3 months from when the calculation is issued to pay whatever is due.

They can also lower her tax code so she pays it off over a tax year.  I asked for a years grace (turned out to be until the next tax year so wasn’t a full year)

I tried to report Carer's Allowance to HMRC so I could be taxed correctly and receive a refund. I ended up filling in a Self-Assessment online which I didn't really want. I filled it in (what a palaver). I did get a refund in July, but HMRC called the Carer's Allowance 'State Pension' which I don't even receive yet. Then I receive a message ' you don't need to complete self assessment form any more', but still call Carer's Allowance  'State Pension' for this tax year. It is confusing to say the least.

Dazed_and_C0nfused

RobertTheBruce said:

peteuk said:

Dazed_and_C0nfused said:

daddydodo said:

Thanks for the reply, I know she'll owe some tax on the payments but we didn't want it to accumulate any further, and certainly wanted to avoid any fine by not completing a self assessment form.

There should be no fine, interest or anything like that.

It might be she is asked to pay HMRC direct for previous tax years (via a Simple Assesment calculation letter) but would always get a minimum of 3 months from when the calculation is issued to pay whatever is due.

They can also lower her tax code so she pays it off over a tax year.  I asked for a years grace (turned out to be until the next tax year so wasn’t a full year)

I tried to report Carer's Allowance to HMRC so I could be taxed correctly and receive a refund. I ended up filling in a Self-Assessment online which I didn't really want. I filled it in (what a palaver). I did get a refund in July, but HMRC called the Carer's Allowance 'State Pension' which I don't even receive yet. Then I receive a message ' you don't need to complete self assessment form any more', but still call Carer's Allowance  'State Pension' for this tax year. It is confusing to say the least.

Your post doesn't really make sense.  Why would reporting extra taxable income (the Carer's Allowance) entitle you to a tax refund?