Joint Assessment, Tax Credits and JB

Discussion in 'Tax' started by ncs, 1 Jan 2019.

  1. ncs

    ncs Registered User

    Posts:
    27
    Hi,

    My OH did not work in 2014 - she received Jobseeker's Benefit only for the qualifying months and did not get Jobseeker's Allowance. We are jointly assessed.

    On our balancing statement for 2014, her PAYE tax credit was reduced. Per online info, it looks like this is to allow for tax due on JB - but the full amount of JB was nevertheless included as income for the joint assessment.

    Can anyone confirm if this calculation is correct - both reducing the credit and taxing the full JB amount? This has resulted in a significant underpayment which we are now facing so I'm just looking for insight ahead of tackling Revenue for an explanation, thanks...
     
  2. Clarkey

    Clarkey Frequent Poster

    Posts:
    247
    Her P.A.Y.E. credit will be restricted to the amount of Jobseekers benefit she received @ 20%
     
  3. PinkLloyd

    PinkLloyd Registered User

    Posts:
    24
    We're in exactly the same situation ..... OH has not worked in 4 years but did claim JB for part of 2014, now Revenue have added the amount of her claim onto my income for 2014 (we're jointly assessed) resulting in an underpayment. There's a note on the P21 balancing statement that says "Collected by reducing your credits in future years €(amount) 2019. All future refunds will be automatically offset against this underpayment until it is fully collected". In other words, the method of collecting the underpaid amount is by reducing the current year's tax credits -- I will have more tax deducted this year as a result.

    What I don't know is when the tax credits will be reduced -- I've already gotten the first payslip of the year and it's the same as what was on the cert that issued in December last for 2019. Perhaps they'll now issue a revised cert?
     
  4. dublin67

    dublin67 Frequent Poster

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    189
    I would hazard a guess with the new 'real time' PAYE system that you'll see your tax credits reduced on your next payslip.
     
  5. PinkLloyd

    PinkLloyd Registered User

    Posts:
    24
    Well hazarded! I just got my payslip and yes, they've reduced my tax credits by exactly the amount of the underpayment, resulting in more income tax being deducted.

    My next step is to see if I'm due a refund for 2015 and submit that ... and if so, presumably the credits will change again.

    The moral of the story is, make sure you've correctly calculated your tax liability before requesting a P21! If only I had known that JobSeeker's Benefit was taxable .... (question: how were they going to collect the tax if I hadn't poked my head above the parapet?)
     
  6. ncs

    ncs Registered User

    Posts:
    27
    Turns out my situation was further complicated by Revenue sending the wrong (overgenerous) credit value to my employer. After a conversation with Revenue ("You are (pause) 12th (pause) in the queue, please hold...") during which an apology was notably absent, they discovered an overpayment in 2015 which largely cancelled out the underpayment so our position now is more or less unaffected.

    In hindsight, I did wonder about the wisdom of requesting a P21 for a comparatively trivial total of medical expenses... but presumably there is nothing to prevent an exercise being done at any time in future years to reconcile JB and taxation history to build a Revenue 'rainy day' fund whereas medical receipts can only be offset for 4 years. Nothing apart from negligence and/or bad practice, that is!