Incapacity benefit and TAX

Chippychap

BINGO. Bless you all sincerely for that.
You can teach a chimp to drink tea, me, it takes a bit longer.

Genny_2

Hi Chippychap,

Is this double attack the way of the world?

I'm retired from the fire service on medical grounds too and have also had a taste of this double whammy :mad:


As you know both your pension and incapacity benefit are taxable.

They don’t take the tax off your IB payment. Instead they reduce the tax
Code being applied to your pension so that you’re pension is being taxed more
to compensate.

Here’s mine for 2008 to 2009 tax year.

My personal allowance £5435
Taxable IB - 400

Leaving a tax free amount of £5035 = Tax Code 503L

This means I’m paying more tax on my pension to make up for the IB not being taxed.

As you also know they reduce your IB because of your pension. Last year mine was reduced to only £5.13 a week!

I wasn't expecting that to happen when I became too ill to work.

All the best Genny

Chippychap

Thanks for that Genny.
I found out that my IB is reduced using my Gross pension not Nett which seems a bit unfair.
PLUS this scrapping the 10p tax thingy has got to impact on us
Apart from that I have had SO much trouble with the revenue cocking up my tax that I wouldn't let 'em feed my cat.
Moan over Genny.
You take care