Benefits and P45

Hello All

My husband is just about to be made redundant at the end of this month and will need to sign on. We have virtually no savings so will qualify for benefits. My worry is that he has had a company car and medical insurance and therefore has a K180 tax code . Obviously this tax code will not be right once he no longer has the company car amd medical ins, but I'm worried about how the job centre will tax his benefit at this code and it's going to take the tax office time to sort it out (past experience with them has taught us not to expect anything to take less than 3 months - except once when we owed them money, then they managed to get it sorted in a fortnight!).

So, my question is - would we be breaking the rules if we withheld the P45 and let them tax him on an emergency code? We're not trying to evade paying any tax due or get anything we're not entitled to, because the tax office will of course make sure all tax due is paid when they issue a new code, but with a mortgage, no savings and two kids we don;t really want to have to pay anything we don;t have to, even though it would be refunded eventually.

Hope that makes sense, would be grateful for any advice at all.

Thanks

Jo

Reply to
FairyDust
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redundancy pay ?

Reply to
Phil Thompson

Don't worry about the tax code. Give the job centre your husband's P45 - not giving the P45 could actually delay you getting benefit or correcting the tax code.

You will still get the same unemployment benefit in monetary terms. (i.e. its paid before tax)

Assuming your tax affairs are relatively simple, the Inland Revenue will automatically sort out the tax situation and give you any refund due in April (assuming he is still registered as unemployed)

Regards Sunil

You can also write/telephone the Inland Revenue and inform them of your changed situation

Reply to
Sunil Sood

The benefits agency does not deduct tax from benefits. Any tax issues get sorted out at the end of the year.

Although benefits are taxable, the amount you receive is below the personal allowance, so if it is the only money you receive in the year, you would have no tax to pay. If you work part way through the year and get benefits to the end of the year, you will probably be due a refund. If you get benefits to partway through the year, and then find work, the benefits will reduce the unused personal allowance available when your pay gets taxed.

Reply to
Jonathan Bryce

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