HMRC Income Tax refund and Universal Credit

timotheus123 · November 2018

HI,
Sill a tax refund paid to me for overpaid income tax effect my Univerdsl Credit payment ?

ie will it be taken as Income ?

Ami2301 · November 2018

Hi @timotheus123 welcome to the community! I am unsure however I'm sure other members of our community will be in touch soon to answer your query.

Do let us know if we can be of any further assistance!

OutOfTheWorld99 · November 2018

Only if the amount paid exceeded what yo received in your Universal Credit Assessment Period.See CAB for this as its a total mind bender and made so in my view as to what peoples assessment periods are.Apparently is different for everyone.It will also be down to how much the refund was for.

[Deleted User] · November 2018

Hi @timotheus123

I think that there may be difference between the treatment of this income depending upon whether it is from self-employment or if it is from employment.

If it is a self-employment matter, I think it could be taken into account, and if not, it may be ignored.

I will try to find the regulation and post it below.

I have found some information, but am sorry to say that I am not completely sure about this.

Gill_Scope

https://www.legislation.gov.uk/ukdsi/2013/9780111531938/regulation/57

https://www.legislation.gov.uk/ukdsi/2013/9780111531938/regulation/66

https://www.moneyadviceservice.org.uk/en/articles/claiming-a-tax-rebate-after-losing-your-job

timotheus123 · December 2018

Hi Gill
is there a definitive answer ?
have received an HMRC tax refund - am self employed and have been since Jan 18.
the HMRC tax refund was for my employment yr 2017/18.

will the universal credit payment in Jan take this into account ?

it seems ridiculous if they do, as it’s nothing to do with my self employment income ..

this is stressing me out big time !

poppy123456 · December 2018

It will be classed as income for that assessment period.

timotheus123 · December 2018

Thanks Poppy. I’ve succumbed to that now. This isn’t right; but they make the rules, as has been said.
Tax paid as employed with company car etc
leave job, start out on your own and it’s tough, hence the UC claim
Then they pay you your overpaid tax when employed and deduct it later from UC

Really can’t be riight in this world.

BenefitsTrainingCo · December 2018

timotheus123,

Yes, I'm afraid it is.

Any refund of income tax, VAT or national insurance (NI) contributions from paid work counts as income.

The only thing which might possibly help is that because it counts as earnings, if you get a work allowance, that should be deducted before the refund affects your UC. You'll get a work allowance (essentially a bit of your income you keep before your UC is reduced) if you have children you claim for, or if you have limited capability for work (that would be an official decision reflected in your UC).

Will

timotheus123 · December 2018

Thanks - so I have to declare it as income?

poppy123456 · December 2018

timotheus123 said:

Thanks - so I have to declare it as income?

DWP will already know you've had the refund.

timotheus123 · December 2018

Well, universal credit helped for 6 months. That’s my lot !
They took my start of the 12 month self employed period as Jan - Dec 18.
So, the end.

timotheus123 · January 2019

Thank you Gill. You were correct. Self employment is treated differently.

[Deleted User] · January 2019

Thanks for posting that, @timotheus, and good luck with your work in the new year. (I hope you don' t need universal credit again, it's not a benefit that anyone wants to claim).

Best wishes

Gill_Scope

mustafaraoof · March 2019

I was penalised heavely by UC.
i received a protective award payment (redundancy) from HMRC .
UC paid me £0.00

wendy41 · August 2022

Thanks to this thread I now know what to expect. Instead of a nasty surprise!

wendy41 · August 2022

Quite agree, ALL IS NOT RIGHT IN THIS WORLD!

Ross_Alumni · August 2022

Hello @wendy41

Thanks for your comments. Do you mind me asking a bit more about what you mean in relation to this thread? Have you been through a similar experience?

fahadali17 · September 2022

Evening, Either I missed the opportunity of reading all this thread or its missing.
Can I have a help on, if UC takes into consideration for tax which has been repaid from employment.
Regards
Fahad

calcotti · September 2022

fahadali17 said:
Can I have a help on, if UC takes into consideration for tax which has been repaid from employment.

A tax refund is taken into account as earnings if the refund is for a tax year in which the claimant was in employment/ self employment.

HMRC Income Tax refund and Universal Credit

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