wirral forums

Tax refund

Posted By: lincle

Tax refund - 13th Jun 2019 5:38pm

If you're receiving Universal credit & get a small refund from 2018/19 when employed will Universal credit deduct it from monthly benefit ? over to you Digging
Posted By: diggingdeeper

Re: Tax refund - 13th Jun 2019 7:06pm

A good question and one I've mulled over in the past myself.

I eventually took the line that when signing-on, it is taken from the last day you WORKED, not from when you were last paid. Therefore it is an income for the period you were working not the period after you were working, the important factor being "when was it earned" income.

It could also be taken as a repayment of a debt which would be obscure to call it "income" at the time it is paid back, albeit it was earned income when it was "loaned".

So basically I didn't fess up BUT the benefits people are renowned for making up rules as they go along so there is always a risk and even if you are right it can take over 9 months to sort it out.

The correct course of action is to tell them and let them decide, then appeal if you think they are wrong but of course you could lose 5 weeks of UC in between.

The above is assuming it was arrears for work (backpay, pay arrears etc), there may be a situation where it is unearned income in which case it would be difficult to say it wasn't income on the day you received it, being unearned the only date possible is the receipt date?

This is very much my own opinion, its up to you to decide for yourself. I should mention my case wasn't UC it was under the old benefits system.

Posted By: lincle

Re: Tax refund - 13th Jun 2019 7:17pm

Thanks Digging. Last month they deducted A miserable £4.10 which was overpaid Working Tax Credit so it may be that HMRC inform U.C anyway. Ive taken it as being an overpayment of tax as employment stopped in February & I think tax is calculated over a 12 month period. We wait with baited breath.Knew I could rely on a reply from you .Thanks
Posted By: diggingdeeper

Re: Tax refund - 13th Jun 2019 7:57pm

One of mine was a refund from the student loan company (overpaid repayments), which is very similar to a refund from overpaid tax, its a debt repayment and has no resemblance to income neither earned nor unearned imho
Posted By: venice

Re: Tax refund - 14th Jun 2019 10:12am

If its counted like a debt repayment , like you say , I don't think its counted. However if its arrears for work, it wouldn't surprise me if they just treat it with the "its the day the money hits your account" judgement .
Posted By: lincle

Re: Tax refund - 14th Jun 2019 3:11pm

Thanks everyone. Some holiday pay was delayed & that was then deducted from U.C so Im hoping they wont touch the tax refund .
Posted By: diggingdeeper

Re: Tax refund - 14th Jun 2019 5:27pm

I'd challenge your holiday pay decision, it is a payment in arrears for a period when you were still employed and was earned income.

Their own rules state holiday pay is counted as earned income, you most certainly did not earn it when you were unemployed.

Ask for a mandatory reconsideration on it and take it from there.
Posted By: lincle

Re: Tax refund - 14th Jun 2019 5:46pm

Didnt think of that Digging thanks again.Its worth querying
Posted By: lincle

Re: Tax refund - 26th Jun 2019 7:37am

Update . After contacting U..C regarding holiday pay the following comment was received " Any payment from an employer will be deducted ftom UC during the UC assessment period it was received in the bank irrespective of what period it covered" . Still not sure on tax rebates .
Posted By: diggingdeeper

Re: Tax refund - 26th Jun 2019 5:21pm

Originally Posted by lincle
Update . After contacting U..C regarding holiday pay the following comment was received " Any payment from an employer will be deducted ftom UC during the UC assessment period it was received in the bank irrespective of what period it covered" . Still not sure on tax rebates .



Ask them for a reference to the section of law that states this ..... and do not accept any reference to guidelines, Universal Credit like all other benefits are governed by Laws not guidelines. If they do state a guideline, ask for a copy of the guideline (which they normally refuse).

You can also state the payment was from a "former employer" not an employer.
Posted By: lincle

Re: Tax refund - 1st Aug 2019 5:37pm

Hi All, Update . Apparently U.C class tax rebate of overpaid tax as earnings & deduct from monthly payment. Also having problem with PIP who are turning down thousands of claims from disabled people who have been getting DLA.They seem to think that a disabled person goes to bed ,then experiences a bolt of lightning & wakes up the next morning cured.! You then protest & wait approx 6 months then if your lucky they reverse the decision & backdate all the missed payments. Great but what do you live on in the meantime . PIP= People in Poverty.
Posted By: diggingdeeper

Re: Tax refund - 1st Aug 2019 9:26pm

Its unbelievable, I found the following about tax rebates ...

A repayment of income tax or national insurance contributions received by
a person from HMRC in respect of a tax year in which the person was in paid work is
to be treated as employed earnings unless it is taken into account as self-employed
earnings under regulation 57(4)


Its totally beyond credibility that you effectively loaned HMRC some money then when they pay it back, UC call it earned income. I'm sure a test case would destroy this, its against basic rights of ownership. If its a rebate from a previous year it is ignored by UC unless it is a large sum above the capital allowance.
Posted By: lincle

Re: Tax refund - 2nd Aug 2019 11:26am

Its a mad situation Digging ,the only time tax refunds or holiday pay from former employer is disregarded is when you have children or limited capacity for work. Getting limited capacity is just another long drawn out process involving mandatory reconsideration & tribunals which take forever. Get limited capacity approved & you get any deductions refunded. It doesnt matter how much proof you send it still has to go through the system. Lots of proof sent to PIP but they cant find it!! Thankfully it was sent recorded delivery so I know theyve got it somewhere. What a load of idiots .
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