UC overpayment, work and PAYE

swesty212

I started work july24 and was overpaid universal credit during the first 4 months of working.

Due to having not worked before July24 I presumed (as my work earnings)would be below the tax threshold this tax year I wouldn't be paying tax on my wages...

However I have been paying PAYE on my wages...

Would the tax allowance include the fact I was overpaid UC after starting my job?

So they have taken the overpayment of UC as earnings? And then decided to tax me...

I'm not sure how this works as obviously I will have to pay the UC overpayment back... (something which im trying to do.. but thats another issue, i tried ringing and making payment, apparently im not on the system.. i recieved notificationfrom.uc journal of total i owed etc.. but ive not been allowed to repay?? )

Anyway so in my thinking the uc overpayment shouldn't be down as earnings...as hopefully soon 🙏 i will be able allowed to pay it back..

Any advice welcome

kaMelo

UC is not a taxable benefit so whatever has happened you are not being taxed on your overpayment.

Dazed_and_C0nfused

swesty212 said:

I started work july24 and was overpaid universal credit during the first 4 months of working.

Due to having not worked before July24 I presumed (as my work earnings)would be below the tax threshold this tax year I wouldn't be paying tax on my wages...

However I have been paying PAYE on my wages...

Would the tax allowance include the fact I was overpaid UC after starting my job?

So they have taken the overpayment of UC as earnings? And then decided to tax me...

I'm not sure how this works as obviously I will have to pay the UC overpayment back... (something which im trying to do.. but thats another issue, i tried ringing and making payment, apparently im not on the system.. i recieved notificationfrom.uc journal of total i owed etc.. but ive not been allowed to repay?? )

Anyway so in my thinking the uc overpayment shouldn't be down as earnings...as hopefully soon 🙏 i will be able allowed to pay it back..

Any advice welcome

I think you're getting confused.

UC is irrelevant for tax purposes as it's a non taxable benefit.

What tax code are you on?  Roughly how much have you earned (the taxable pay on your latest payslip) from July to now?

swesty212

Here is a copy of my work payslip total so far

swesty212

Tax code 1254LX

Dazed_and_C0nfused

Try calling HMRC and seeing if they can issue a cumulative tax code (the X isn't part of your code, it signifies the code is being used on a non cumulative basis).

You will then get the benefit of the tax code allowances you haven't used from April to July.

It looks like you have paid about £900 more tax than you need to.

That would mean you have more take home pay in March so could have an impact on your Universal Credit.

swesty212

Dazed_and_C0nfused said:

Try calling HMRC and seeing if they can issue a cumulative tax code (the X isn't part of your code, it signifies the code is being used on a non cumulative basis).

You will then get the benefit of the tax code allowances you haven't used from April to July.

It looks like you have paid about £900 more tax than you need to.

That would mean you have more take home pay in March so could have an impact on your Universal Credit.

I'm no longer recieving uc since beginning of Nov 24

Dazed_and_C0nfused

swesty212 said:

Dazed_and_C0nfused said:

Try calling HMRC and seeing if they can issue a cumulative tax code (the X isn't part of your code, it signifies the code is being used on a non cumulative basis).

You will then get the benefit of the tax code allowances you haven't used from April to July.

It looks like you have paid about £900 more tax than you need to.

That would mean you have more take home pay in March so could have an impact on your Universal Credit.

I'm no longer recieving uc since beginning of Nov 24

Win win then 😉

swesty212

I'll try call hmrc on Monday 👍

Just for information...Would I have just got a rebate after april?

NedS

swesty212 said:

I'll try call hmrc on Monday 👍

Just for information...Would I have just got a rebate after april?

Normally, if you have overpaid on PAYE tax, you will automatically get a tax refund in the new tax year, but it would be better to get your tax code adjusted, and then as long as you are in work, the amount of tax paid would be adjusted each pay period to keep it correct.

Dazed_and_C0nfused

swesty212 said:

I'll try call hmrc on Monday 👍

Just for information...Would I have just got a rebate after april?

Yes, HMRC would make any refund due later this summer.

But what @NedS says is right, better in your account in the next month than in say 6 months.