income tax deducted from incapacity benefit

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  • #21615
    Nathan Jessup
    Participant

    A claimant has incapacity benefit of £152.80 per wk gross and has £7.30 per wk deducted from it. DWP state that this is because her total income exceeds the tax limit so she is liable to pay tax.
    My question is….do we use the net amount for HB purposes?
    I have read CH/0051/2008 which relates to occ pen deducted from IB and in this case the net figure should be used.
    The Regs state that the gross amount should be used “where the reduction is due to some form of recovery”.
    I feel that the tax deduction is not a form of recovery so we should use the net figure (as we would with earnings).
    Am I right?

    #5580
    Carol Meredith
    Participant

    Income tax is not a form of recovery, therefore you can use the net amount in this case.
    Carol

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