Hi, I recently signed off JSA as I have started work. I received a letter through stating this;

"We are writing to tell you that Jobseekers allowance can count as taxable income. You can get full information in leaflet IR41, available from this office or the inland revenue.

For the period up to january 2010 in the 2010 tax year we paid a total allowance of 2190 pounds of which 2190 was taxable. This is added to any earning for this year.

If you think the amount of taxable allowance is wrong, you should write to the office giving your reasons. You must do this within 60 days of this letter, as you cannot challenge it afterwards.

We cannot check your tax position because of a lack of tax information. We have notified the inland revenue. They will pay any refund due, or if you owe any tax they will tell you how it is to be collected"

Wtf is this on about? Do I owe them 2190 pounds? I'm 19 and I signed on after I left college, while I was signed on I looked for work and have landed a job working 25 hrs a week earning about 480 quid a month, it's my first ever job. I live alone as my Dad lives at his girlfriends so I have nobody to help me understand this better. With my current wage I can just about live from month to month with spare money to save or spend on whatever I like.

I'm bricking it as I don't understand this letter one bit, I was obviously receiving income based JSA as I had never worked before I got this job.

Any help will be appreciated!!!

Hi,

Firstly, stop worrying. You don't owe them a penny.

I think I am right in saying this. As JSA is classed as taxable income. this amount will be taken off your taxable allowance for the year. You will need your tax code to work out what your allowance is.

For example, If your tax allowance is £6985, they take £2190 off that allowance so you will pay tax on earnings over £4795.

That's how I see it and if I'm wrong, we'll soon find out but the important bit is that you don't owe them money.

Hi,

Firstly, stop worrying. You don't owe them a penny.

 

I think I am right in saying this. As JSA is classed as taxable income. this amount will be taken off your taxable allowance for the year. You will need your tax code to work out what your allowance is.

For example, If your tax allowance is £6985, they take £2190 off that allowance so you will pay tax on earnings over £4795.

 

That's how I see it and if I'm wrong, we'll soon find out but the important bit is that you don't owe them money.

How do I find out my tax allowance o_O

I'm currently earning around 6k a year. So lets just say my tax allowance IS 6985 and they take away the 2190, how much tax per year will I be paying?

And thanks for clearing up my stupid worries about ME owing THEM money, lol. I always think the worst and that they're out to rob me.

Bear in mind that I could still be wrong in my tax assumptions, I worked out that on:

Rough tax allowance 6985

Less the taxable benefit 2190

leaves you tax allowance as 4795

You earn 6 grand a year so:

annual earnings 6000

take off allowance 4795

this leaves 1205 as taxable pay

I think tax is still 20% so that would mean you would pay around £240 a year in tax. You don't pay it all in one go. They take it weekly or monthly if paid monthly.

Did you get a P45 from the jobcentre when you signed off. (If not,it may take a few days to get to you) this will have your tax code on it.

Bear in mind that I could still be wrong in my tax assumptions, I worked out that on:

 

Rough tax allowance 6985

Less the taxable benefit 2190

leaves you tax allowance as 4795

 

You earn 6 grand a year so:

 

annual earnings 6000

take off allowance 4795

this leaves 1205 as taxable pay

 

I think tax is still 20% so that would mean you would pay around £240 a year in tax. You don't pay it all in one go. They take it weekly or monthly if paid monthly.

 

Did you get a P45 from the jobcentre when you signed off. (If not,it may take a few days to get to you) this will have your tax code on it.

Yes, I received my p45 yesterday I gotta take it to work on Monday. Maybe I'll find out more after that.

On your P45 it will have a tax code on it. It may have changed a bit in the 12 years since i last worked:mad: but it should have a letter followed by 3 numbers.

On your P45 it will have a tax code on it. It may have changed a bit in the 12 years since i last worked:mad: but it should have a letter followed by 3 numbers.

Yup that is correct I have 3 digits followed by a letter, your memory isn't too bad afterall

Yup that is correct I have 3 digits followed by a letter, your memory isn't too bad afterall

Well what are they??:D Lots of people have the same so don't worry about it being too personal

I was thinking of trying to work out how much tax you could be paying

Well what are they??:D Lots of people have the same so don't worry about it being too personal

647L

Ah well, my estimate was out a bit

You tax allowance is £6475 per year

so another calculation needed.

£6475 minus

£2190 is

£4285

Your wages approx £6000

Take off allowance £4285

leaves £1715 as taxable income

As I said, if the lower tax rate is still 20% the you would pay around £343 a year in tax which works out in a full year to around £6.60 a week.

I'm not going to go into the fact that this financial year ends in april as this will confuse me too much. The Tax year starts from the 6th April

26 quid a month isn't too bad. Thanks for all your help dude! It's helped me understand this system a little bit better.

Can one off you help me out please I got the same bladdy letter :/ what is actually gonna happen am scared?

Can one off you help me out please I got the same bladdy letter :/ what is actually gonna happen am scared?

Don't panic. JSA is taxable income, but that doesn't mean that you owe any tax - it's a standard letter.

Could you explain a little more about your circumstances? Have you started a new job after being on JSA? When did you last work and pay tax? Do you know your tax code (you don't have to post it here, but do you know what it is?)

I repeat, don't panic.

I had the same letter 3 years ago. Because I didn't work before claiming JSA or signing off, that was it. As mentioned, it's a standard letter.

Hello antone thanks a lot mate but what do they mean by we have notified inland revenue and I have just signed off can't be bothered with jobseeker they're not helpful at all mate. Antone or Nystagmite can you get back to me ASAP about what they mean by 'We have notified the inland revenue' ?? that is really scaring me :/

and my tax code is 810L

Are the inland revenue gonna do anything :/ really panicking help

Again, it's nothing to worry about. The Jobcentre always notifies the Inland Revenue (now called HMRC) when a JSA claim is closed.

The reason for all of this is that JSA is taxable income, but no tax is deducted when it's paid to you. That's because you're entitled to a tax-free allowance each tax year, an amount of earnings or other taxable income on which you pay no tax. Your tax code tells you what that allowance is: yours is 810L which means you can earn £8100 between the 6th April 2012 and the 5th April 2013 and not be liable for income tax.

So, for example, if you received (say) £2000 in JSA during that period, you could earn a further £6100 before you would be liable for income tax. Have you done any paid work in that time?

okay so will i get another letter after this :/?? and no I am looking for work hopefully get one in a month's time mate and I only claimed 667.8 pounds. I am just scared :/

so why does it say we have notified inland revenue and if they owe me tax ill get a refund or if you owe any tax they will tell you how is calculated? help! :/ just solve this for me antone really stressed

so why does it say we have notified inland revenue and if they owe me tax ill get a refund or if you owe any tax they will tell you how is calculated? help! :/ just solve this for me antone really stressed

I don't know what to say except "Stop being Stressed!"

As I said, JSA is taxable income, but if your only income since April 2012 has been £667 in JSA then you will not owe any tax and there is no problem. None. You will not hear about this again. The Jobcentre has "informed Inland Revenue" because the law says they have to - it's standard and is not anything to worry about.

If you had worked between April 2012 and April 2013, your JSA would be added to whatever you had earned and that's how they'd work out the tax you owed. Since you seem to be saying that you haven't worked in that period, you will owe no tax and there is no further issue. File the letter for reference and ignore it.

I did exactly what Atone said above a few years ago. I spoke to CAB because I didn't understand the letter. Because I wasn't working after signing off, nothing was done.