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Max1968

Universal Credit and Tax Rebate Question?

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Cannot seem to find the answer anywhere so was hoping someone may be able to advise onhow I may deal with this when the time comes?

 

Think in the four months I have been on Universal Credit I have had a full payment just the once due to having a couple of part time employers with varied offers of work and hours whilst I look again for full time.

 

Back in October/November I received two Tax Rebates, one higher than the other.

This was a tad surprising so I rang the Tax Office to see if this was correct and was informed that one was definitely correct but the advisor seemed a bit confused about the other and couldn’t say for sure.

 

He said my two options were to place the second rebate to one side until they sorted it out in April 19 or I could use it but may have to pay it back in April if it was paid in error.

 

My problem was is that Universal Credit takes tax rebates as earnings it affected my paymentsand I got a big fat zero that month UC wise therefore having to use the rebate to live on. Ironically the Council “do not” take tax rebates as earnings so it didn’t count against my Council Tax benefit which was a blessing of sorts but obviously if I am in the same financial situation in April and this rebate has to be paid back I am going to be in difficulty.

 

If that is the case and it was paid to me in error can I claim for any backdated payment of Universal Credit for that particular month?

My thoughts behind this are that I was obviously paid nothing UC wise that month due to the rebate being classed as earnings but if the rebate has to be paid back then it was earnings I technically did not have, receive, earn, if you get my drift!!!!

Ie – If I hadn’t been paid that rebate I would have received full UC for that month and I wouldn’t potentially be having to pay anything back in April to HMRC?

 

Of course it may be that it is a legit payment and I won’thave to pay it back but I won’t know until April.

 

All a bit of a disaster, I have no idea why HMRC couldn’t work this out correctly back in October…

 

. Thank you.

Edited by dx100uk
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I would say no as it was income available to you at the time for you to spend, regardless of whether you have to pay it back or not.

 

As such the UC award would be technically correct at the time the decision was made.

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Thought as much thanks tomtom. A real quandary though as the option of not spending it as HMRC suggested was difficult considering UC was zero that month due to that.

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Thought as much thanks tomtom. A real quandary though as the option of not spending it as HMRC suggested was difficult considering UC was zero that month due to that.

 

All that happens is that UC receives earnings data from HMRC 3 times everyday. UC then stores up this data during the assessment period and applies it to the statement for the month.

 

Your employers payroll should know exactly how this all works as they should have read all of the relevant instructions. They should know that the data they process, will be used by different bodies including UC. They should be fully aware that any tax refund that comes up, will be treated as earnings, as it affects the net earnings total they are reporting.

 

If there are issues with an employers payroll, it would be advisable to take this up with the payroll department and to ask questions about their processes.

 

Having seen payroll errors generated by many different organisations, including large private and public sector organisations, it does raise the question about how they manage staff data. The was one very large NHS trust that outsourced payroll and the company given the contract totally ballsed it up, leading to the NHS trust taking payroll back in months later. There seems to be a lack of care taken with the data and not enough thought that errors might cause staff suffering as a result.

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So it's Payroll who would make the error rather than HMRC?

 

Must confess I did query both at the time. In my employment which finished in July 18 (another thread where they put me on the wrong contract) I had a nightmare with the Tax Office as two months in three they placed me on a temporary tax code which meant I got walloped tax wise although I am pretty sure they rectified it the following month. Then when I left that job I received an extra £500 or so in wages which was a surprise at the time but it seemed to be because of the wrong contract scenario where they had originally kept wages back for holiday as I had been put incorrectly on a permanent contract. So when it was rectified to a fixed contract I was told the holiday pay that had been kept back had been paid in my last pay-packet but I was taxed quite heavily on that.

 

Then I had three casual employers. On 5th October I received a £279 tax refund from an agency through their payroll People Paye on top of wages. I can remember calling the employer rather confused and he called payroll who confirmed it was a tax refund. Then on 31st October I got a payment from another casual employer which was far to high for the work I had done. Without a payslip at the time I contacted the employer about the error and they said I had been given a £309 tax refund. To be honest one was a surprise let alone both. That's when I called HMRC and I am pretty sure they said the first one was 100% correct but they weren't sure on the second one but couldn't say for sure until April 19.

 

What confuses me is the different amounts. If they had both been the same you could argue a payment that's been duplicated because of two different employers but I won't be sure until April unless you think a phone call to both payrolls could solve the mystery?

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Yes it will the payroll that is totally responsible for the issues you have experienced. It is all just electronic data these days and if you cannot get payroll to confirm the information, you will need to speak to HMRC. HMRC should be able to tell you exactly what information is on your record from the employers.

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Thanks UB,,,,,

 

Another question whilst I am here. I have just received a phone call from a company that deals with Investment Advice, similar to PPI. They came to me over a year ago advising that they felt I had been mis sold investments many years ago. In a nutshell my bank is offering me a pay-out, which was quite a surprise!! The pay-out is in the region of 15000 so after paying this companies bill I will be left with around 9000.

 

I know obviously I will have to declare this to the DWP but whilst I am not working how does this affect Universal Credit? I have noted online the information about savings and capital between 6000 and 10000 but can't seem to find any definite advice regarding any lump sum windfall? Thank you.

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