Why have I been sent a P60U Tax Form though on ESA

Having been on ESA/IB for some years The Tax System is a mystery and I know next to nothing about it.
During Incapacity Benefit I was never contacted by The Tax Office at all so I assume as I had low income and negligible income from any other source I was exempt and the tax position was adjusted automatically?
But this spring newly on ESA I got sent a P60U "Certificate of Pay & Taxable Benefit & Tax Deducted?refunded."(=nil)
It states the benefit to the year 1st April.
It doesn't mention ESA but on the back states " Jobseekers Allowance is subject to tax"
Nowhere does it refer to ESA.
But Im not nor have been on JSA!
Is there some mistake here?
The other thing is when the ESA(IB) & LCW end soon It will be half way through the tax year.
I don't know what is to happen then I will be on zero income and as I will not have any income
anywhere near the tax threshold annually will not meet the criteria for completing a tax return.
Will I be placed in the "work system "tax wise and have nethertheless to complete a tax return
in April 2015?
Would there be any advantage in keeping the LCW claim onlyu,open until then to make a whole tax year and would I get extra pension money if you have 36/37 years of pension credits?

James wrote: Having been on ESA/IB for some years The Tax System is a mystery and I know next to nothing about it.
During Incapacity Benefit I was never contacted by The Tax Office at all so I assume as I had low income and negligible income from any other source I was exempt and the tax position was adjusted automatically?
But this spring newly on ESA I got sent a P60U "Certificate of Pay & Taxable Benefit & Tax Deducted?refunded."(=nil)
It states the benefit to the year 1st April.
It doesn't mention ESA but on the back states " Jobseekers Allowance is subject to tax"
Nowhere does it refer to ESA.
But Im not nor have been on JSA!
Is there some mistake here?
The other thing is when the ESA(IB) & LCW end soon It will be half way through the tax year.
I don't know what is to happen then I will be on zero income and as I will not have any income
anywhere near the tax threshold annually will not meet the criteria for completing a tax return.
Will I be placed in the "work system "tax wise and have nethertheless to complete a tax return
in April 2015?
Would there be any advantage in keeping the LCW claim onlyu,open until then to make a whole tax year and would I get extra pension money if you have 36/37 years of pension credits?

Hi J,

For some IB recipients, their IB was Tax Exempt, however there is no such exemption for ESA

My IB was tax exempt; will it still be under ESA?

CB ESA is classed as "Taxable Income" hence the P60.

It only really becomes pertinent if your Taxable Income nears £200/Week, as this is the current Personal Allowance allowed before Income Tax is payable.

www.hmrc.gov.uk/manuals/pommanual/paye77250.htm

www.gov.uk/income-tax/taxfree-and-taxable-state-benefits

www.hmrc.gov.uk/incometax/personal-allow.htm

It would be pertinent to a CB ESA recipient who was also in receipt of an Occupational Pension (OP) as the CB ESA and any OP would be added together, (much as if you had two separate jobs)

If the total amount of "Taxable Income" from the CB ESA and OP exceeded your Personal Allowance, then Income Tax would be payable on the excess.

With regards to "The Works System" that you mention the rules for paying Income Tax are much the same.

Of course you would have to be in receipt of Taxable Income or some earnings from employment, before you would be liable for payment of Income Tax.

Most earnings from employment are paid under The Pay As You Earn (PAYE) system where the employer pays your tax as you earn. Of course, some people are employed on a "self employed"
basis where they are liable to pay their own Tax.

I couldn't comment on when it would be better to close your ESA Claim (if that is what you intend to do) with respect to "Income Tax".

Currently, once you have the requisite number of NI Credits for your full State Pension, there is no advantage to gaining any more. However, this does not mean that things will not change regarding this in the future.

bro58

Hmm Thanks Bro for explain that so its just one year of ESA Cb then they are talking about it wont come to over £4000 with sanctions in the second half nethertheless I will hang on to the Certificate just in case.
Are you absolutely certain that if your not getting £200 per week then you don't need to bother obtaining or filling out a tax return not even return one ticking some box or other to the effect that you do not meet criteria for tax?
It just feels a bit strange being in a limbo no mans land neither in work but off all benefits but I suppose there are such people eg. living at home or with relatives etc and using eg food banks?

James wrote: Hmm Thanks Bro for explain that so its just one year of ESA Cb then they are talking about it wont come to over £4000 with sanctions in the second half nethertheless I will hang on to the Certificate just in case.
Are you absolutely certain that if your not getting £200 per week then you don't need to bother obtaining or filling out a tax return not even return one ticking some box or other to the effect that you do not meet criteria for tax?
It just feels a bit strange being in a limbo no mans land neither in work but off all benefits but I suppose there are such people eg. living at home or with relatives etc and using eg food banks?

Hi J,

Why would you have to fill in a Tax Return when your only income is CB ESA ?

You are not liable to Income Tax unless you are in receipt of taxable income in excess of your personal tax free allowance. (PA)

This PA is currently circa £10,000/Year (£200/Week) as seen on the link that I provided :

"There are 3 levels of Personal Allowance.

Personal Allowance 2014 to 2015 tax year

Income limit
Born after 5 April 1948
£10,000
£100,000

Born between 6 April 1938 and 5 April 1948
£10,500
£27,000

Born before 6 April 1938
£10,660
£27,000."

From :

www.hmrc.gov.uk/incometax/personal-allow.htm

Any CB ESA that you may be paid before payments cease and you close your claim may be pertinent if you then gained employment in the same Tax Year. (April to April)

Your CB ESA payments would then be added to any payments from employment in the same Tax Year.

If added together, your personal tax free allowance was exceeded, you might then be liable for Income Tax, for that Tax Year.

bro58