Housing Benefit adversely impact me?

**northernladuk** · 14 August 2013, 08:50

Out of work for 4 months and you are eligible for housing benefit? Jesus....

**vadhert** · 14 August 2013, 08:51

Originally posted by heyya99 View Post

At the start of this year, I was out of contract for 4 months. I applied to my local council for housing benefit. They assessed my claim and came to the conclusion I was due some money. I am now back in contract and the money I now receive is down to £12 per month.

Upon advice from my accountant, I have contacted my council and cancelled my claim. My accountant also suggested I pay the money I received back (around £4k). The reason I should pay it back was because my accountant said he expected the benefit payment to push my dividends into the higher rate tax bracket which would mean that I would have to pay 25% personal tax on the dividends that exceed the threshold.

When I told my council this, they said they didn't believe that the benefit payment would impact me personally and to ask HMRC to confirm. When I contacted HMRC, they said that the benefit payment was a personal income and would not impact my income tax.

I am happy to pay the money back if it is to my benefit in the long run but I want to make sure I am doing it for the right reasons.

Do any of you contractors know much about this area and could offer me some advice?

Save a bigger war chest so you don't have to do this

**heyya99** · 14 August 2013, 08:59

As weird as this may sound, I actually didn't intend on claiming this. I heard about the single person's council tax reduction and filled out the wrong form. I was amazed when the council came back saying I was owed money. I should have stopped it immediately but then again, I was out of work. I even went to the council and told them it couldn't possibly be right that I'm owed money. They disagreed. Only my accountant raised concerns.

The fact I got the money isn't the issue here really. It's whether it's in my benefit to pay it back, as suggested by my accountant. My accounant hasn't earned my trust yet so I'm looing for a second opinion. £4k is alot of money to pay back on the whim of an accountant who doesn't care what I do.

**northernladuk** · 14 August 2013, 09:09

Originally posted by heyya99 View Post

As weird as this may sound, I actually didn't intend on claiming this. I heard about the single person's council tax reduction and filled out the wrong form. I was amazed when the council came back saying I was owed money. I should have stopped it immediately but then again, I was out of work. I even went to the council and told them it couldn't possibly be right that I'm owed money. They disagreed. Only my accountant raised concerns.

The fact I got the money isn't the issue here really. It's whether it's in my benefit to pay it back, as suggested by my accountant. My accounant hasn't earned my trust yet so I'm looing for a second opinion. £4k is alot of money to pay back on the whim of an accountant who doesn't care what I do.

You filled out the wrong form?!? Jesus....

Are you sure you didn't fill out the wrong form incorrectly? Something doesn't sound right at all here... but anyway... If your accountant doesn't care what you do I would be thinking about moving. I pay mine to care.

**quackhandle** · 14 August 2013, 09:30

At least they aren't accusing you of fraud. My council was paying CT/Housing benefit for two years, I was getting a bill saying nothing to pay.

Earlier this year they accused the wife of fraud, had interview under caution, a total sodding nightmare. The benefit was in her name but CT was in joint name. WTF?

Agreed to pay it all back but then they tried to fine us 900 notes on top. Fought it with help of solicitor and local MP but not something I'd like to go through again.

Issue caused by the Job Centre people not bothering to send a letter/email/call to the council. Makes the Bobs look efficient and clever. Solicitor said we had a case however but she said the local council will never admit to any mistake

</rant over>

qh

**Pondlife** · 14 August 2013, 09:48

The reason I should pay it back was because my accountant said he expected the benefit payment to push my dividends into the higher rate tax bracket which would mean that I would have to pay 25% personal tax on the dividends that exceed the threshold.

Erm, pay less in divs this year maybe?

I assume you mean this tax year as your accountant said they expected you would go over.

**Brett at Nixon Williams** · 14 August 2013, 10:04

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

**northernladuk** · 14 August 2013, 10:09

Question to the OP. You don't have £16k in savings or equity in the house or any other investments you could call on at all? Nothing?

I would be very worried of a situation like qh's. Filling the wrong document in for this lot and getting accepted IMO with no other diligence isn't a situation I would be wholly comfortable with.

**Ticktock** · 14 August 2013, 10:46

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?

Housing Benefit adversely impact me?