The DWP wants my bank statements going back to 2010.?

YOU know if you've claimed benefits, and they may well have got that wrong and churned out a standard letter. Tell them they got it wrong and ask for more time to get copy bank statements. As they are too incompetent to put a phone number on the letter, you'll have to email or use 1st class post. I would suggest, if you use post, sending the letter "signed for" so you KNOW it got there.

If you have over £16,000, you are not entitled to income-related benefits at all. You got that bit right. But it is only if your savings are under £6,000 that you get the full rate of benefit. Between £6,000 and £16,000, benefits are reduced on a sliding scale.

The more serious point is that you have been illegally evading tax. Youtube is NOT an employer and does not deduct tax for you. You should have registered for self-assessment as self-employed, so that HMRC can ask you for an annual tax return and tax you based on that, and also charge Class 2 National Insurance. Bank interest has tax taken off at source, so they won't have asked for tax on that, but youtube is not a bank! So as Enough Trolls says, HMRC have started asking youtube for details of what they have paid to people so they can tax it.

The best thing at this point about that is to register as self-employed and do your back tax returns. Explain to HMRC that you didn't know you had to do this and apologise. Co-operation will reduce the penalties that they charge. You will also have to pay the tax plus interest on paying it late. Technically you are guilty of "cheating Her Majesty's Revenue" and they can take you to court for that, but co-operate and pay up and they won't.

You must know if you've claimed benefits. It's not something you can do unconsciously or automatically. Thank them for their letter and say that you've never claimed or received any means tested benefits.

Any income you receive from youtube counts as self-employment and you are supposed to tell HMRC that you are self-employed. They will then collect Class 2 National Insurance contributions. You also pay income tax on your profits which are your income less expenses and overheads. You can count the cost of running your computer and internet access as overheads.

Tax was not deducted automatically, you knew this. You was trading without notifying.

The law was clarified fairly recently and youtube (and other providers) have been compelled to inform HMRC - to put it in a nutshell - You Are Busted.

You claimed benefits while making money from youtube AND you falsified your claim to the DWP. Ask your bank for copies of your accounts - they have decided to get you for 2010 onwards - well be gratefull they are not digging deeper.

Get the copies - hand them over - register for Self Assessment with HMRC and get the tax returns done. You will certainly pay penalties - co-operate fully and they will settle for the tax due, plus interest plus the standard penalties. if you refuse to co-operate they will assess you and possibly go for a fraud prosecution.

14 days - is the law, from then the interest AND PENALTIES accrue on a daily basis. Purely personally I would advise total co-operation and ask for time to pay.

Basically they are saying you committed fruad by having an income from youtube and not declairing it to the tax office and should not have been claiming benefit and earning at the same time. They will question you under caution and advise you to bring a lawyer with you and they will treat you like a criminal and then appear in court for fraud and probably get community service and have ti pay back what you earned from youtube - it happened to a neighbour, Good Luck

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youtube does not take out tax. if you have not been claiming this on your taxes you will have some issues. You will at a minimum have to pay back taxes on all your youtube earnings