New style esa adjustment to tax code

Rheumgirl59

I understand that my tax code is adjusted to allow for esa but am confused how they work it out. I am currently at the stage where I have filled out the long medical form and expecting to be called for an assessment. I started receiving money from end of December and they adjusted my tax code. Now I have had a message from inland revenue about the tax code for next year and it is completely different. My problem is that I have tried all sorts of combinations of possible awards but can't get to a similar figure. Does anyone know how they work it out or if they are helpful should I ring dwp. 
Hope this makes sense. I think it went from 1216 to 44xx can't remember the last two digits. I won't get anywhere near that sum even if awarded it because I had to take my private pension early. Thank you for reading! 

calcotti

If you are in Support Group for next year the taxable ESA is 52 weeks at £129.50/week = £6,734.00
If you are in Assessment phase for next year the taxable ESA for a full year is 52 weeks at £84.80/week = £4,409.60. In reality you will not get 52 weeks of Assessment rate because next tax year because you will only get ESA for a maximum of 52 weeks from when you claimed unless you are placed in Support Group. Therefore if you are not put in Support Group you will get less than £4,409.60 in next tax year and if put in Support Group your ESA will go up so taxable amount will be higher.

For the current year the taxable amount depends on how many weeks you have been receiving ESA for. £77.00/week x the number of weeks in the tax year (about 16 weeks).

Rheumgirl59

Thank you so much that is really clear and helpful. I guess I assumed they would automatically adjust it to account for the 52 weeks total aspect and the reduction because of my pension but clearly not. I know they only estimate and the end of the year determines the total but they have put a br code on my little job which is about 2 hours a month so I expect further jiggling into the year! Thank you again for your time. 

calcotti

Does your tax code include a figure for your pension?

Re ESA, is your pension going to be more than £85/week (£4,420/annum)?

Rheumgirl59

Yes I have part of the tax code for my pension and they have taken away the bit allocated to my little job. My pension is over 85 per week so I am currently getting about 44 per week for esa. I wrongly assumed they would take the amount I actually get for their figures but suspect from your information the tax code is against the amount before deductions. Thank you again. 

calcotti

Rheumgirl59 said:

Yes I have part of the tax code for my pension and they have taken away the bit allocated to my little job. My pension is over 85 per week so I am currently getting about 44 per week for esa. 

Apologies, in that case my earlier analysis is wrong.

Your ESA assessment rate in assessment phase is £77 minus roughly £33 due to your pension. Your pension is therefore roughly £151/week.

The ESA should therefore be maximum £1,716/annum if being paid assessment rate at £33/week. If your ESA is only fairly new it looks as if the ESA figure used by HMRC probably doesn’t take the pension deduction from ESA into account. 

You should get a P60 from ESA by May/June and HMRC will, in due course, check your 2022-23 tax liability and will refund any tax over paid.

For next year you can always keep HMRC up to date about what you actually get from ESA and they can then update the Tax Code.

Rheumgirl59

Perhaps they will wait to see if I am approved. It will work out in the end. To be honest I'm very grateful for whatever they give me. Thank you for your time