Tax return - "Tax refunded or set-off"
Discussion
Sorry for another tax return question. I'm being asked ...
"You have said that you had tax refunded or set-off by us or Jobcentre Plus in the tax year 2016 to 2017. Please complete the following question. Income tax refunded or set-off:"
Earlier in the tax return I selected "yes" from the drop-down as I did have tax refunded, hence why I'm now being asked the above question.
I did have a tax refund, but it showed up in my wage slip, it didn't come from HMRC or Jobcentre plus. I've already shown it as a minus figure in the section for tax paid on the relevant bit of employment as you should if there's an "R" next to it on your P60.
Is the "Tax refunded or set-off" bit something that I need to ignore as I didn't have a refund sent to me by HMRC or Jobcentre plus, or do I need to show the amount again in this section because I did receive a refund, albeit in my wage slip?
"You have said that you had tax refunded or set-off by us or Jobcentre Plus in the tax year 2016 to 2017. Please complete the following question. Income tax refunded or set-off:"
Earlier in the tax return I selected "yes" from the drop-down as I did have tax refunded, hence why I'm now being asked the above question.
I did have a tax refund, but it showed up in my wage slip, it didn't come from HMRC or Jobcentre plus. I've already shown it as a minus figure in the section for tax paid on the relevant bit of employment as you should if there's an "R" next to it on your P60.
Is the "Tax refunded or set-off" bit something that I need to ignore as I didn't have a refund sent to me by HMRC or Jobcentre plus, or do I need to show the amount again in this section because I did receive a refund, albeit in my wage slip?
No, you must enter it in the right place on the return.
Any PAYE you had deducted on your salary in tax year 2016/17 will already have been adjusted for tax being refunded to you from an earlier tax year. So, when you look at your P60, the PAYE deducted shown on the P60 will be a combined amount made up of the actual Income Tax on your salary for 2016/17 less any tax refunds you received in respect of previous tax years.
The self assessment system wants to calculate your definitive and correct tax position for 2016/17. Therefore, when you are entering the PAYE amount that is shown on your P60., you need to indicate somewhere on the return whether the PAYE shown on the P60 contained any adjustments in respect of earlier years.
Any PAYE you had deducted on your salary in tax year 2016/17 will already have been adjusted for tax being refunded to you from an earlier tax year. So, when you look at your P60, the PAYE deducted shown on the P60 will be a combined amount made up of the actual Income Tax on your salary for 2016/17 less any tax refunds you received in respect of previous tax years.
The self assessment system wants to calculate your definitive and correct tax position for 2016/17. Therefore, when you are entering the PAYE amount that is shown on your P60., you need to indicate somewhere on the return whether the PAYE shown on the P60 contained any adjustments in respect of earlier years.
Anyone else know?
In summary...
In section 3 "Tailor your Return", it asks "Have you had any 2016-17 Income Tax refunded or off-set by us or JobCentre Plus?"
I answered yes as I'd received a refund.
In section 4 "Fill in your return", it asks "UK tax taken off [company name] pay:"
I entered a negative value to show the refund displayed on my P60.
In section 4 "Fill in your return", it states "You have said that you had tax refunded or set-off by us or Jobcentre Plus in the tax year 2016 to 2017. Please complete the following question. Income tax refunded or set-off:"
This refers to the question to which I answered "yes" in Section 3.
My question is, should I have answered "yes"? My refund appeared on my pay slip and was included with my salary - it didn't come as separate payment from HMRC or Jobcentre Plus, so maybe that's something entirely different to which I should have answered "no".
Anyone?
In summary...
In section 3 "Tailor your Return", it asks "Have you had any 2016-17 Income Tax refunded or off-set by us or JobCentre Plus?"
I answered yes as I'd received a refund.
In section 4 "Fill in your return", it asks "UK tax taken off [company name] pay:"
I entered a negative value to show the refund displayed on my P60.
In section 4 "Fill in your return", it states "You have said that you had tax refunded or set-off by us or Jobcentre Plus in the tax year 2016 to 2017. Please complete the following question. Income tax refunded or set-off:"
This refers to the question to which I answered "yes" in Section 3.
My question is, should I have answered "yes"? My refund appeared on my pay slip and was included with my salary - it didn't come as separate payment from HMRC or Jobcentre Plus, so maybe that's something entirely different to which I should have answered "no".
Anyone?
I think the refund was due to a period of being out of work in 2016/2017.
I started the 2016/2017 tax year in full time employment which had run continuously since November 1997. This lasted until the end of August at which point I was made redundant. I secured new employment at the start of Feb 2017. A refund was shown on my P60, most of which was made in my February pay.
I started the 2016/2017 tax year in full time employment which had run continuously since November 1997. This lasted until the end of August at which point I was made redundant. I secured new employment at the start of Feb 2017. A refund was shown on my P60, most of which was made in my February pay.
Edited by MitchT on Wednesday 10th January 17:15
If it is all contained within the PAYE calculations for 2016/17, then you don't have to do anything regarding showing it separately on the 2016/17 self assessment tax return.
Lets show how it might work with some fictional figures -
Gross Salary per P60 - £45,0000
Tax Deducted under PAYE Per P60 - £7,200
Final Tax Code - 1100L (i.e. £11,000 Personal Tax Allowances)
In this example, the PAYE calculated is exactly correct for the circumstances pertaining to 2016/17. If it some point during the year, you had been overpaying tax through PAYE but later in the year the matter had been sorted and the overpaid tax had been refunded to you through the PAYE system, then by the time you got to the end of tax year 2016/217 the PAYE system had sorted it all out. Consequently, there is no reason to make any additional entries in the 2016/17 self assessment tax return apart from the Gross Salary amount (£45,000 in the above example) and the PAYE deducted £7,200 in the above example).
If, however, in tax year 2016/17, HMRC amended your tax code to allow you to recover some PAYE you had overpaid in (say) tax year 2015/16, then some of the PAYE shown on the P60 would actually relate to 2015/16 and not 2016/17 - so THAT would need to be shown separately in the 2016/17 so that the self assessment system ignored it when arriving at your true 2016/17 tax liability.
Lets show how it might work with some fictional figures -
Gross Salary per P60 - £45,0000
Tax Deducted under PAYE Per P60 - £7,200
Final Tax Code - 1100L (i.e. £11,000 Personal Tax Allowances)
In this example, the PAYE calculated is exactly correct for the circumstances pertaining to 2016/17. If it some point during the year, you had been overpaying tax through PAYE but later in the year the matter had been sorted and the overpaid tax had been refunded to you through the PAYE system, then by the time you got to the end of tax year 2016/217 the PAYE system had sorted it all out. Consequently, there is no reason to make any additional entries in the 2016/17 self assessment tax return apart from the Gross Salary amount (£45,000 in the above example) and the PAYE deducted £7,200 in the above example).
If, however, in tax year 2016/17, HMRC amended your tax code to allow you to recover some PAYE you had overpaid in (say) tax year 2015/16, then some of the PAYE shown on the P60 would actually relate to 2015/16 and not 2016/17 - so THAT would need to be shown separately in the 2016/17 so that the self assessment system ignored it when arriving at your true 2016/17 tax liability.
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