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Paying tax on cESA after UC migration
- LittleC
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2 months 3 weeks ago #298752 by LittleC
Paying tax on cESA after UC migration was created by LittleC
Hi there,
I have been receiving cESA with an irESA top up. Because cESA is taxable and I do some permitted work this takes me over the tax-free income threshold. I get a letter each year telling me what tax I owe. .
I’m Now going through managed migration to UC and have 2 questions related to this.
Since cESA is simply deducted from UC, and UC is not taxable like cESA, it seems that by continuing the cESA component I’ll be paying this tax for no reason? Last year I paid £550 so its a sizable amount. Is there a way I can drop the cESA component so I’m not paying this tax?
And if so, are there any downsides to doing this? Are there any reasons to keep the cESA component?
I have been receiving cESA with an irESA top up. Because cESA is taxable and I do some permitted work this takes me over the tax-free income threshold. I get a letter each year telling me what tax I owe. .
I’m Now going through managed migration to UC and have 2 questions related to this.
Since cESA is simply deducted from UC, and UC is not taxable like cESA, it seems that by continuing the cESA component I’ll be paying this tax for no reason? Last year I paid £550 so its a sizable amount. Is there a way I can drop the cESA component so I’m not paying this tax?
And if so, are there any downsides to doing this? Are there any reasons to keep the cESA component?
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- Gary
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2 months 3 weeks ago #298766 by Gary
Nothing on this board constitutes legal advice - always consult a professional about specific problems
Replied by Gary on topic Paying tax on cESA after UC migration
Hi LittleC
When you get an IR ESA top up this is usually due to you being entitled to disability premiums such as SDP or EDP, with UC you no longer receive any disability premiums.
In regard to your tax query, you need to seek advice from your local Welfare Rights Organisation; advicelocal.uk, they will be able to take all your circumstances into consideration.
Remember CB ESA is paid fortnightly whereas UC is paid monthly.
Gary
When you get an IR ESA top up this is usually due to you being entitled to disability premiums such as SDP or EDP, with UC you no longer receive any disability premiums.
In regard to your tax query, you need to seek advice from your local Welfare Rights Organisation; advicelocal.uk, they will be able to take all your circumstances into consideration.
Remember CB ESA is paid fortnightly whereas UC is paid monthly.
Gary
Nothing on this board constitutes legal advice - always consult a professional about specific problems
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- LittleC
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2 months 2 weeks ago #299071 by LittleC
Replied by LittleC on topic Paying tax on cESA after UC migration
Hi Gary,
thanks for your thoughts. A related question:
In order to pay this tax I put some money in a savings account. On the UC claim form it asks for money that won’t be included in savings, and one option is money put aside for tax - ‘money for tax if you’re not self-employed’. In this case, I'm not self-employed but do have money put aside for this tax - can I tick this?
Thanks
Chloe
thanks for your thoughts. A related question:
In order to pay this tax I put some money in a savings account. On the UC claim form it asks for money that won’t be included in savings, and one option is money put aside for tax - ‘money for tax if you’re not self-employed’. In this case, I'm not self-employed but do have money put aside for this tax - can I tick this?
Thanks
Chloe
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- Gary
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2 months 1 week ago #299314 by Gary
Nothing on this board constitutes legal advice - always consult a professional about specific problems
Replied by Gary on topic Paying tax on cESA after UC migration
Hi LittleC
If you have money put aside to pay tax, then yes, tick the box.
Gary
If you have money put aside to pay tax, then yes, tick the box.
Gary
Nothing on this board constitutes legal advice - always consult a professional about specific problems
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