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  • FIRST POST
    • Punmanuk
    • By Punmanuk 11th Jul 18, 7:52 AM
    • 50Posts
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    Punmanuk
    Tax refund and universal credit
    • #1
    • 11th Jul 18, 7:52 AM
    Tax refund and universal credit 11th Jul 18 at 7:52 AM
    I am in uc. Getting personal allowance and housing elements. Not working atm. I got a tax rebate. Will it effect how much I get this month?
Page 1
    • MarkN88
    • By MarkN88 11th Jul 18, 1:11 PM
    • 330 Posts
    • 149 Thanks
    MarkN88
    • #2
    • 11th Jul 18, 1:11 PM
    • #2
    • 11th Jul 18, 1:11 PM
    I don!!!8217;t think that it would.
    • huckster
    • By huckster 11th Jul 18, 2:06 PM
    • 3,432 Posts
    • 1,509 Thanks
    huckster
    • #3
    • 11th Jul 18, 2:06 PM
    • #3
    • 11th Jul 18, 2:06 PM
    If it is reported through HMRC and UC pick this up through their data feed to HMRC it might be considered as earnings.

    When you were taxed too much, they took away from earnings that you should have had at the time. When you later receive the tax rebate, it is counted as earnings when you get paid the amount.

    Remember UC takes into account earnings when they are actually received and not when you worked the hours.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
    • Punmanuk
    • By Punmanuk 11th Jul 18, 2:18 PM
    • 50 Posts
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    Punmanuk
    • #4
    • 11th Jul 18, 2:18 PM
    • #4
    • 11th Jul 18, 2:18 PM
    So how much will they deduct?
    • huckster
    • By huckster 11th Jul 18, 2:59 PM
    • 3,432 Posts
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    huckster
    • #5
    • 11th Jul 18, 2:59 PM
    • #5
    • 11th Jul 18, 2:59 PM
    If you have no work allowance due to children or Limited Capability for Work, then the deduction will be 63 pence for each £1 shown as earned.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
    • Punmanuk
    • By Punmanuk 11th Jul 18, 3:27 PM
    • 50 Posts
    • 1 Thanks
    Punmanuk
    • #6
    • 11th Jul 18, 3:27 PM
    • #6
    • 11th Jul 18, 3:27 PM
    Well I am not working at the min..I am looking for work..so I get personal allowance and housing allowance..so will it still be 63p for every pond?
    • huckster
    • By huckster 11th Jul 18, 6:19 PM
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    huckster
    • #7
    • 11th Jul 18, 6:19 PM
    • #7
    • 11th Jul 18, 6:19 PM
    Tax rebate counts as late paid earnings, so it should be reported and the 63p deduction from each £1 of UC should be applied.

    It is a bit harsh, but the tax rebate is considered as earnings. You might be unemployed now, but it is still money you are being paid now.

    If it not showing on the UC statement for the relevant period, you should report it, as if you don't you might be contacted about this non disclosure. In theory HMRC should record it and UC should be informed, but it might not happen.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
    • Icequeen99
    • By Icequeen99 11th Jul 18, 10:11 PM
    • 3,608 Posts
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    Icequeen99
    • #8
    • 11th Jul 18, 10:11 PM
    • #8
    • 11th Jul 18, 10:11 PM
    Tax rebate counts as late paid earnings, so it should be reported and the 63p deduction from each £1 of UC should be applied.

    It is a bit harsh, but the tax rebate is considered as earnings. You might be unemployed now, but it is still money you are being paid now.

    If it not showing on the UC statement for the relevant period, you should report it, as if you don't you might be contacted about this non disclosure. In theory HMRC should record it and UC should be informed, but it might not happen.
    Originally posted by huckster
    Tax refunds don't always count as income for UC it depends on what period the refund relates to and whether the person was in 'paid work' (as defined for UC purposes) in that period. If they were it counts, if they were not it doesn't.

    Also, HMRC shouldn't record it in theory. The only data UC get sent is RTI data the source of which is employers so normal refunds from the HMRC reconciliation process don't come through to UC as a matter of course.

    IQ
    • Punmanuk
    • By Punmanuk 11th Jul 18, 11:02 PM
    • 50 Posts
    • 1 Thanks
    Punmanuk
    • #9
    • 11th Jul 18, 11:02 PM
    • #9
    • 11th Jul 18, 11:02 PM
    What do u mean as paid work? The tax rebate was for last year..I got rebate for last year..I lost my job in July and in nov last year applied for uc..never been on any benefits before
    • huckster
    • By huckster 11th Jul 18, 11:54 PM
    • 3,432 Posts
    • 1,509 Thanks
    huckster
    What they mean is that you were being employed by a company, paid as an employee, when this overpayment of tax occurred. If you then received the tax rebate later, within a Universal Credit claim period, you then disclose it as income.

    If however, you were self employed that is a different story.

    You raised the question here today, so it means you were aware it might affect your UC claim. If the tax rebate income is not recorded on the UC statement, because UC don't receive tax rebate data from HMRC, then technically you should contact UC to report this. Provide all of the information and let UC consider whether they need to apply a deduction.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
    • Mejustme
    • By Mejustme 21st Dec 18, 1:12 PM
    • 8 Posts
    • 0 Thanks
    Mejustme
    I’ve had an HMRC refund from employed erarnings and overpaid tax - the period is 2017/18.
    I’ve been self employed since jan 18 ... will this amount be taken off my self employed universal credit ?
    • Dazed and confused
    • By Dazed and confused 21st Dec 18, 1:26 PM
    • 3,581 Posts
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    Dazed and confused
    Is this refund as a result of completing your 2017:18 Self Assessment return?
    • Mejustme
    • By Mejustme 21st Dec 18, 4:10 PM
    • 8 Posts
    • 0 Thanks
    Mejustme
    HMRC refund self employed
    Hi there
    Iíve received a cheque for income tax overpaid by me in the financial yr 2017/18.

    I registered for UC in May 18 but my self employment started in January 18.

    Will the tax refund be taken as earnings by UC in January 19 ?

    As I see it, itís nor earnings. Itís a repayment of moneyís ive already paid ...

    Help !!
    • Mejustme
    • By Mejustme 21st Dec 18, 4:12 PM
    • 8 Posts
    • 0 Thanks
    Mejustme
    Not a tax return, an overpayment
    • calcotti
    • By calcotti 21st Dec 18, 4:45 PM
    • 1,283 Posts
    • 872 Thanks
    calcotti
    It will be treated as earned income and 63% will be deducted from your UC award for the month.
    • Mejustme
    • By Mejustme 21st Dec 18, 5:09 PM
    • 8 Posts
    • 0 Thanks
    Mejustme
    Thatís ridiculous!
    Itís not earned money. If thatís true, the system is wrong. I paid too much income tax, a refund is only due on the basis that it was overpaid in the first place.

    Canít be right.
    • Dazed and confused
    • By Dazed and confused 21st Dec 18, 5:24 PM
    • 3,581 Posts
    • 1,797 Thanks
    Dazed and confused
    But because of the tax deducted at the time your net pay was lower then. And so any Universal Credit payment would have been higher than it should have been.

    On a separate point you need to remember to include the tax refund in the appropriate box on your 2017:18 Self Assessment return when you come to file this.
    • calcotti
    • By calcotti 22nd Dec 18, 7:01 AM
    • 1,283 Posts
    • 872 Thanks
    calcotti
    That’s ridiculous!
    It’s not earned money. If that’s true, the system is wrong. I paid too much income tax, a refund is only due on the basis that it was overpaid in the first place.

    Can’t be right.
    Originally posted by Mejustme
    I agree it's unfair but it's the rules.

    As dazed and confused says for people who were on Universal Credit at the time they over paid tax it's logical because they would have got more benefit previously so this can be seen as a correction. However I would suggest that if people are getting UC, even if they are earning it is likely that they are not earning enough be paying tax

    However many people will only be on benefits now because they have had a change of circumstances, like yourself. They will not have been receiving benefits when tax was overpaid but now suffer a loss of benefits because of the refund. This effectively means that they do not get the full refund of tax paid which they never owed in the first place.

    It is worth noting that this is a deliberate change of policy because for previous benefits tax refunds are ignored as income and are treated as capital which, for most people, has no impact on their benefit amount.

    If you don't like it you can raise the matter with your MP (but your UC in January will be reduced).
    Last edited by calcotti; 22-12-2018 at 9:35 AM.
    • Dazed and confused
    • By Dazed and confused 22nd Dec 18, 10:03 AM
    • 3,581 Posts
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    Dazed and confused
    If you don't like it you can raise the matter with your MP (but your UC in January will be reduced).
    Bit harsh for MP's to do that just cause someone's not happy
    • calcotti
    • By calcotti 22nd Dec 18, 1:31 PM
    • 1,283 Posts
    • 872 Thanks
    calcotti
    Bit harsh for MP's to do that just cause someone's not happy
    Originally posted by Dazed and confused
    Surely it's the role of MPs to listen to grievances of their constituents and take matters up with the government as appropriate. As per my previous note there has been a change of policy and it would be completely appropriate for MPs to ask if this was appropriate.
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