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JSA & Tax Refund

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JSA & Tax Refund Empty JSA & Tax Refund

Post by Jara Thu May 02, 2019 9:00 pm

Hello everyone!

Me and my partner just received around £800 as tax refund from DWP. I never thought they actually would have kept track of that P45 form my partner handed after they left work, so I am a little bit surprised.

We are on a joint income-based JSA claim at the moment.

Now my question. Do we need to report this tax refund to our work coach? And will it reduce the amount of JSA we will get the coming weeks?

Jara

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Post by Non Deficere Thu May 02, 2019 9:44 pm

Jara wrote:Hello everyone!

Me and my partner just received around £800 as tax refund from DWP. I never thought they actually would have kept track of that P45 form my partner handed after they left work, so I am a little bit surprised.

We are on a joint income-based JSA claim at the moment.

Now my question. Do we need to report this tax refund to our work coach? And will it reduce the amount of JSA we will get the coming weeks?

Great news!

More good news:

Income tax refunds

26060 Earnings of employed earners are taxed under the PAYE scheme by direct deduction from wages or salary. Any refunds of income tax should be treated as capital1 (see DMG 32782 for the exception to this rule in trade dispute cases). 1 JSA Regs, reg 110(2); IS (Gen) Regs, reg 48(2)

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/788536/dmgch26.pdf

I am presuming the sum does not take you above the £6000 capital limit.

For UC claimant it is treated as income:

H3022 An actual repayment to the claimant of
1. income tax or
2. NI contributions by HMRC in respect of a tax year in which a person was in paid work is treated as employed earnings
1. Where the paid work was from carrying on a trade, profession or vocation then the repayment is treated as S/E earnings2 (see ADM H4131). Note 1: Repayments of income tax may include tax relating to other sources such as unearned income. As long as the claimant was in paid work in the tax year the repayment relates to, then the whole repayment is treated as earnings. Note 2: There is no requirement for the claimant to report changes that take place in relation to their tax code or variations in their tax reported via RTI. 1 UC Regs, reg 55(4A); 2 reg 57(1) Example Ellie receives a cheque from HMRC for £200. This relates to an overpayment of £600 income tax made in the tax year 11/12 (in which Ellie was in paid work) and an underpayment of £400 in income tax relating to the tax year 12/13. The amount that Ellie should declare as employed earnings is £200 as this is the repayment she received, not £600 which relates to the refund due in one of those years.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/767105/admh3.pdf
Non Deficere
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Post by Jara Thu May 02, 2019 9:59 pm

That's great to hear Smile

Do we still need to tell our work coach we received tax refund?

Thank you for your help!

Jara

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Post by Non Deficere Thu May 02, 2019 10:01 pm

Glad to help!

DWP already knows.
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Post by Caker Fri May 03, 2019 2:12 pm

Jara wrote:That's great to hear Smile

Do we still need to tell our work coach we received tax refund?

Thank you for your help!

Nothing to report to the wc.
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