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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hi. My elderley disabled mother got a fairly large lump sum

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Hi. My elderley disabled mother got a fairly large lump sum (£15000) recently as she had been paid the wrong level of attendance allowance for a number of years. The lump sum corrected the underpayment but did not reflect any inflation effect for the backdated amounts. The question I have is whether she will be liable for tax on this lump sum as I do not have records of her income / interest etc going back that far so I dont know whether she would have been over the tax threshold if she had received the correct payment at the right time. Can you advise what I need to do to resolve this as she is very worried she owes money to the tax man
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

You will be pleased to know that attendance allowance is a non taxable benefit.

You don't report it to HMRC on your tax return.

I hope this is helpful and answers your question.
Customer: replied 3 years ago.


Is it the same for carers allowance ?

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply...

Carer's allowance is taxable, I'm afraid....

Confirmation of this can be found here

https://www.gov.uk/taxable-income/state-benefits-that-are-taxable

I hope this is helpful and answers your question.

Customer: replied 3 years ago.

do how do i work out how much tax she owes if we dont have details of her income etc to know if she would have been over the tax threshold if she had been paid the correct amount at the right time - the problem is the rebate covers many years on underpayment

Expert:  taxadvisor.uk replied 3 years ago.
You have stated she received £15,000 to cover many years of underpayment.
You should ask for a breakdown per each tax year to work out her income for that tax year to ascertain if any tax would be due after taking personal allowances into consideration.

What other income does your mother have?

They should be able to give you a breakdown.

You may find that once you have got a figure for each tax year they is no tax payable.

I hope this is helpful
Customer: replied 3 years ago.


i have the breakdown of the rebate per year. my problem is my mother has no record of her income /savings interest so far so I can't work it out whether the rebate would have taken her over the threshold. will the tax office have this information ?

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply...

Personal allowance for someone aged 75 and over in a tax year over last 4 tax years
2009-10 £9,640
2010-11 £9,640
2011-12 £10,900
2012-13 £10,660
2013-14 £10,660

The tax office would only have the information if your mother has filed a tax return.
Ask your mother if she has any savings and gets any interest from savings... if so the bank/building society should be able to give you the information as far as interest goes.
Interest received on ISAs to be excluded as that is tax free for every one.
Is she in receipt of state pension. If so, DWP shoudl be able to help you with with the pension is.. if money going into a bank account you should be able to work out her pension income.
You may find at the end of the day, there is little or nothing to pay.

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4882
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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