Wage advance and UC

Yessy

Hi everyone.
I had a wage advance from the next month's wage(£200). This was reported to UC as earnings £350 earned + £200 extras, £550 net used for UC calculations. Then the next month I got £958 earnings - £200 already paid, £958 net used for UC calculations. In theory the £200 was counted twice.
Spoke with UC that say they disregard the £200 deductions. Told me to speak with employer and HMRC. They told me everything was reported correctly and to go back to UC. DM then sent me a report, similar to mine, that was for someone else and the decision is correct.
In theory, if I'd had advanced £50,000 and got nothing the following months, they would have put down i still earned £50,000 and £100,000 in total.
I'm baffled, please help.

Thanks

huckster

UC go by HMRC RTI information reported by your employers.

If your employers included the £200 in the next wages reported, as well as when they paid and reported the advance wages, this is not something that UC can resolve.

8dayweek

Advances of Wages are ignored in the AP in which they’re physically paid. They get taken into account the AP’s in which they’re recovered via your Wages (i.e. UC use the Wages including the third party deduction to repay the Advance). 

Do you have the HMRC app to check what your Employer has reported? It’s almost certainly your error as UC would have no other way of knowing about the advance / loan from your Employer. 

Yessy

8dayweek said:

Advances of Wages are ignored in the AP in which they’re physically paid. They get taken into account the AP’s in which they’re recovered via your Wages (i.e. UC use the Wages including the third party deduction to repay the Advance). 

Do you have the HMRC app to check what your Employer has reported? It’s almost certainly your error as UC would have no other way of knowing about the advance / loan from your Employer. 

Employer reported £350 earned and £200 'extra' in March pay, £550 net. £550 was used for UC calculations.
Employer reported £958 earned, with £200 'already paid' in April pay, £758 net. Yet £958 was used for UC calculations.
Not sure what you mean by "it's almost certainly your error".
March I had £200 advance, which was counted earnings by HMRC and UC. April it was taken back by my employer, but was also counted earnings again. I can understand that UC think I was given the advance in the same pay period of April, like a bank transfer or in cash.

sheramber

Your employer should not have shown the advance on the March submission. 

The advance should be included  as  normal pay  when it was due. I.e. April. 

The rules were changed from 6 April 2024.

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye72053

Yamor

The salary advance rules introduced last year don't apply here. They only apply where the advance payment is made for work already carried out. For example, where half your monthly salary is paid to you half way through the month. In your case, the payment was made the previous month.

The most likely description of what has taken place here is that you were given a loan of £200. (Say you had left the job immediately after receiving the March pay, including the extra £200 - would your employer have asked you for that £200 back? Almost certainly yes.)
As such, the £200 should only have been included as taxable pay on the RTI in April.
You should ask your employer to amend the March submission to show that the £200 was not taxable pay.
The relevant HMRC guidance about this is here:
https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye72050

8dayweek

Yessy said:

8dayweek said:

Advances of Wages are ignored in the AP in which they’re physically paid. They get taken into account the AP’s in which they’re recovered via your Wages (i.e. UC use the Wages including the third party deduction to repay the Advance). 

Do you have the HMRC app to check what your Employer has reported? It’s almost certainly your error as UC would have no other way of knowing about the advance / loan from your Employer. 

Employer reported £350 earned and £200 'extra' in March pay, £550 net. £550 was used for UC calculations.
Employer reported £958 earned, with £200 'already paid' in April pay, £758 net. Yet £958 was used for UC calculations.
Not sure what you mean by "it's almost certainly your error".
March I had £200 advance, which was counted earnings by HMRC and UC. April it was taken back by my employer, but was also counted earnings again. I can understand that UC think I was given the advance in the same pay period of April, like a bank transfer or in cash.

Sorry, that was meant to say your EMPLOYERS error. My bad. 

Your Employer seems to have reported the Advance as taxable Earnings. 

You should be able to see here what they’ve done >>>

https://www.gov.uk/log-in-register-hmrc-online-services

LITRG

Hello, Please find some guidance on how to challenge UC awards where there is an issue with the underlying RTI data: https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/rti-and-universal-credit/