Housing Benefit adversely impact me?

[GillsMan]

So in essence, you happily took the money in benefits when it was available to you, but now you don't want to either return it, or pay more in tax?

Read the OP again. OP quite clearly states they are happy to repay it, but only if it's advantageous to do so. Perfectly reasonable question to me. But yeah, feel free to fire off without reading the OP properly. WP.

[Ticktock]

Read the OP again. OP quite clearly states they are happy to repay it, but only if it's advantageous to do so. Perfectly reasonable question to me. But yeah, feel free to fire off without reading the OP properly. WP.

Oh, I did read it. The OP took money made available in a fund aimed to support those in need.
He is no longer in need (and may not have been at the time - if he was surely he would have intended to make the claim and it not been an accident?).
He is now questioning how to ensure he pays back as little as possible - should he hand back the money he doesn't (didn't?) need, in order to avoid paying a higher tax rate on an incremental amount of dividends.

[NotAllThere]

Discussion on whether he shouldn't be claiming as he doesn't "need" the money is irrelevant and will cease now. It's been done to the death.

[Podgy]

Whatever benefit you were entitled to cannot be 'repaid' - what would be your basis for repaying? my accountant 'thinks' I may go over a tax bracket this year!! what a rubbish accountant.

I don't think you can just pay back benefit! You must have been entitled to it to receive it - how do you think they will manage you trying to pay it back? probably via a fraud investigation!

Also you dont have to be completely penniless to receive benefits!

When you sign off benefits you get a statement of what amount is taxable i.e. to use for any self assessment (this is usually after claiming JSA). I take it you did not get any statement.

At least you found out your accountant is rubbish quite quickly.

[heyya99]

He's from SJD Accounting and he's useless.

[heyya99]

I have contacted my accountant with the news from Revenue that the benefit is none-taxable and won't impact my business. He has come back and said if the Revenue have confirmed that the money is not taxable and doesn't have to be declared on my personal tax return then I will not have to pay the money back.

What are people's take on that? I'm very confused now as to what to do. I want to keep my nose clean in all this.

[heyya99]

Hi heyya99,

Housing benefit is a non-taxable social security benefit and hence should not affect your taxable income. See Social security benefits: list of non-taxable social security benefits

Whether or not you were entitled to this is a different matter.

I hope this clarifies.

Brett

Thanks.

Regarding whehter I'm entitled or not, I gave the Revenue as much info as I could. All my savings, my income, my ISAs. I even had them reassess the claim when I didn't think I was entitled. They weren' aware I was getting a salary as well as a dividend (I did tell them). When I got the reassessment, they still claimed I was due money. I have tried to be as open as possible in this process. My only fear is that I forgot to declare something, but I have no idea what.

[Boo]

Regarding whehter I'm entitled or not, I gave the Revenue as much info as I could. All my savings, my income, my ISAs. I even had them reassess the claim when I didn't think I was entitled. They weren' aware I was getting a salary as well as a dividend (I did tell them). When I got the reassessment, they still claimed I was due money. I have tried to be as open as possible in this process. My only fear is that I forgot to declare something, but I have no idea what.

My take : you worry too much.

Forget the money, benefits amount to a tiny sum in the grand scheme of things anyway, HMRC have told you that you're in the clear wrt tax on HB in any case so what's the issue ?

Boo

[Brett at Nixon Williams]

Thanks.

Regarding whehter I'm entitled or not, I gave the Revenue as much info as I could. All my savings, my income, my ISAs. I even had them reassess the claim when I didn't think I was entitled. They weren' aware I was getting a salary as well as a dividend (I did tell them). When I got the reassessment, they still claimed I was due money. I have tried to be as open as possible in this process. My only fear is that I forgot to declare something, but I have no idea what.

I cannot comment on whether or not you were entitled to it. If you have provided details of all your income etc. and the Council still says you are entitled to it, so be it. I would keep the evidence to support this in the event this may be questioned later down the line.

In respect of paying the money back to purely save tax (if this did apply let's assume), you would still be out of pocket. Would you rather not have the income to simply save tax?

For example, instead of housing benefit, say you received bank interest of £80 (£100 gross with £20 of tax deducted at source).

A higher rate tax payer would pay an extra £20, i.e. £100 @ 40%, less the £20 deducted at source.

Would you then want to not receive the interest and be out of pocket £60, to effectively avoid having to pay the extra £20 in tax?

Hope this puts it into perspective.

Brett