Shall I just get an accountant?
Discussion
Had a letter through from HMRC saying I need to do a tax return this year, its the first time I would have done one. It just happens I've got my pension statements through it appears 20/21 my pension growth rate was well over the £40k annual tax free limit and has been for a few years.
Looking at the HMRC website it says I'll need to pay tax(income tax??) on the additional amount??
I'm waiting for my self assessment login details to arrive, but I have zero interest in this stuff, so is it just easier to get an accountant at this stage?? I suspect there is a load of stuff I could claim back for work like professional fees/expenses but don't.
How hard is the pension tax thing to sort out without any accountant, am looking to 'avoid' any tax just want it sorted properly?
How much do accountants charge anyways for very basic work??
Looking at the HMRC website it says I'll need to pay tax(income tax??) on the additional amount??
I'm waiting for my self assessment login details to arrive, but I have zero interest in this stuff, so is it just easier to get an accountant at this stage?? I suspect there is a load of stuff I could claim back for work like professional fees/expenses but don't.
How hard is the pension tax thing to sort out without any accountant, am looking to 'avoid' any tax just want it sorted properly?
How much do accountants charge anyways for very basic work??
Define "very basic work".
Once you are listed as having to complete a Self Assessment tax return, it means that your tax affairs are no longer "basic". That is what the Self Assessment system, is for, to allow taxpayers to sort their tax affairs out correctly when the automated calculated deduction systems - such as PAYE - are not capable of calculating and deducting your taxes consistently and accurately.
I would normally charge about £200 for completing a Self Assessment tax return that is triggered by a single event and does not contain other sources of Self Assessment income such as rental income, sole trader income or partnership income.
Once you are listed as having to complete a Self Assessment tax return, it means that your tax affairs are no longer "basic". That is what the Self Assessment system, is for, to allow taxpayers to sort their tax affairs out correctly when the automated calculated deduction systems - such as PAYE - are not capable of calculating and deducting your taxes consistently and accurately.
I would normally charge about £200 for completing a Self Assessment tax return that is triggered by a single event and does not contain other sources of Self Assessment income such as rental income, sole trader income or partnership income.
Eric Mc said:
Once you are listed as having to complete a Self Assessment tax return, it means that your tax affairs are no longer "basic". That is what the Self Assessment system, is for, to allow taxpayers to sort their tax affairs out correctly when the automated calculated deduction systems - such as PAYE - are not capable of calculating and deducting your taxes consistently and accurately.
Thanks for that explanation, I've asked around some friends to get some recommendations, I don't have any other income apart from PAYE, a few hundred £££ seems like a good idea versus me trying to figure it out my self!You are still going to have to gather the necessary data for an accountant (which is the boring bit). Once you have the appropriate data you are, based on the simplicity of your affairs, paying someone to fill the boxes with the numbers you have provided.
I work closely with accountants and have professional respect for the complex work they undertake. However, your requirements do not appear to fall in that category on the face of it.
From a financial education perspective this is a good opportunity to get to grips with the basics of your own financial affairs.
I work closely with accountants and have professional respect for the complex work they undertake. However, your requirements do not appear to fall in that category on the face of it.
From a financial education perspective this is a good opportunity to get to grips with the basics of your own financial affairs.
Edited by DoubleSix on Saturday 23 October 09:21
Jasey_ said:
I have no idea how the NHS pension works and I'm guessing your earnings put you in the high rate tax band.
If I were a gambling man I'd say you're probably in line for a tax rebate.
If you don't have a colleague with a similar position who can help it could well be time for an accountant.
That said self assessment is pretty straight forward these days.
If his question is in fact related to his PIP then he would be better advised to speak with an IFA/Financial Planner.If I were a gambling man I'd say you're probably in line for a tax rebate.
If you don't have a colleague with a similar position who can help it could well be time for an accountant.
That said self assessment is pretty straight forward these days.
It so happens that the BMA recommends a specific, independent, firm to assist it’s members in exactly these matters. So the OP should have an existing route to qualified advice from advisers that know the NHS pension scheme inside out.
As you say, the self-assessment aspect is essentially straight forward.
Edited by DoubleSix on Saturday 23 October 11:54
DoubleSix said:
You are still going to have to gather the necessary data for an accountant (which is the boring bit). Once you have the appropriate data you are, based on the simplicity of your affairs, paying someone to fill the boxes with the numbers you have provided.
I work closely with accountants and have professional respect for the complex work they undertake. However, your requirements do not appear to fall in that category on the face of it.
From a financial education perspective this is a good opportunity to get to grips with the basics of your own financial affairs.
Thanks, I'll wait for the tax return login to arrive and have a look.I work closely with accountants and have professional respect for the complex work they undertake. However, your requirements do not appear to fall in that category on the face of it.
From a financial education perspective this is a good opportunity to get to grips with the basics of your own financial affairs.
I understand your final point, but I really have 0% interest in this, I know I get a decent salary that I work hard for, I know I'm never going to be going down to the job centre looking for work, considering my parents couldn't afford a private car till I was 10 (a £500 Talbot rusting Solara) and we use to live in one semi-detached house with one bathroom shared between three families, I'm more than 'happy' with our families financial situation. I just want to pay the right amount of what am suppose to, and be done with it.
Edited by gangzoom on Saturday 23 October 09:40
DoubleSix said:
If his question is in fact related to his PIP then he would be better advised to speak with an IFA/Financial Planner.
It so happens that the BMA recommends a specific, independent, firm to assist it’s members in exactly these matters. So the OP should have an existing route to qualified advice from advisors that know the NHS pension scheme inside out.
I know the BMA/lots of options for this, but zero interest down that route. It so happens that the BMA recommends a specific, independent, firm to assist it’s members in exactly these matters. So the OP should have an existing route to qualified advice from advisors that know the NHS pension scheme inside out.
In my experience once you have all the data to hand, a self assessment form will take 30 minuets to complete. Its knowing what data is needed and getting it together that takes the time and effort. As said you will have to gather the data for someone else to fill out your form. Its called "self assessment" for a reason.
Firstly I'm no finance wizard, just a layman but looks like you have two NHS pension schemes you are contributing to, the 1995 to 2008 scheme and the 2015 scheme.
If you add both the contributions for the year mentioned together then you are over the standard £40k pension input period (annual) limit by just under £14k.
I don't know anything about NHS pensions so that would need checking and would need to go back over the previous years contributions too. It's also assuming you don't have other pensions elsewhere.
You can offset ithe current years exceedance of the limit against the previous 3 years if you haven't also exceeded the limits in those years and I guess up to those limits.
You might be getitng an HRMC letter because you have exceeded it for 3 years but that is just guessing.
You would have to pay income tax on the exceedance as obviously the exceedance has gone into your pension before tax taken.
Note that the £40k limit reduces depending on your overal income, over £200k/annum is the trigger point for a reduced allowance, there are other higher triggers too. It's why £40k is called the 'standard' allowance.
It's all explained here:
https://www.gov.uk/tax-on-your-private-pension/ann...
As others have said above a tax return is a case of gathering the info first and then filling in the form. Gathering the info takes the most time and would still have to be done even if you got an accountant (bank statements, pension statements etc. etc.).
You could get an accountant to complete and submit the tax return, my dad used to as he couldn't fathom it all (own small business), they did the return in conjunction with the annual accounts. They charged about £200 but that was a few years ago so would be more now and costs will vary depending on location.
Once one lot is done, unless there is big changes in circumstance or legislation, then the following years return should be similar so fairly easy to then DIY if you wanted.
I did my dads tax returns for him when he retired and he folded the business.
Going forward, and again as others have said above, you might be better off seeking financial advice especially regarding the NHS pensions as you could be shooting yourself in the foot by paying too much in and also exceeding Lifetime Allowances.
If you add both the contributions for the year mentioned together then you are over the standard £40k pension input period (annual) limit by just under £14k.
I don't know anything about NHS pensions so that would need checking and would need to go back over the previous years contributions too. It's also assuming you don't have other pensions elsewhere.
You can offset ithe current years exceedance of the limit against the previous 3 years if you haven't also exceeded the limits in those years and I guess up to those limits.
You might be getitng an HRMC letter because you have exceeded it for 3 years but that is just guessing.
You would have to pay income tax on the exceedance as obviously the exceedance has gone into your pension before tax taken.
Note that the £40k limit reduces depending on your overal income, over £200k/annum is the trigger point for a reduced allowance, there are other higher triggers too. It's why £40k is called the 'standard' allowance.
It's all explained here:
https://www.gov.uk/tax-on-your-private-pension/ann...
As others have said above a tax return is a case of gathering the info first and then filling in the form. Gathering the info takes the most time and would still have to be done even if you got an accountant (bank statements, pension statements etc. etc.).
You could get an accountant to complete and submit the tax return, my dad used to as he couldn't fathom it all (own small business), they did the return in conjunction with the annual accounts. They charged about £200 but that was a few years ago so would be more now and costs will vary depending on location.
Once one lot is done, unless there is big changes in circumstance or legislation, then the following years return should be similar so fairly easy to then DIY if you wanted.
I did my dads tax returns for him when he retired and he folded the business.
Going forward, and again as others have said above, you might be better off seeking financial advice especially regarding the NHS pensions as you could be shooting yourself in the foot by paying too much in and also exceeding Lifetime Allowances.
Jasey_ said:
I have no idea how the NHS pension works and I'm guessing your earnings put you in the high rate tax band.
If I were a gambling man I'd say you're probably in line for a tax rebate.
If you don't have a colleague with a similar position who can help it could well be time for an accountant.
That said self assessment is pretty straight forward these days.
I'm afraid not. Add up the total 'Growth' figures. I see 29 and 24. The surplus over 40K allowance is added to your income and taxed! The OP has a tax bill to pay If I were a gambling man I'd say you're probably in line for a tax rebate.
If you don't have a colleague with a similar position who can help it could well be time for an accountant.
That said self assessment is pretty straight forward these days.
. You don't need an accountant if you can follow basic math.Edited to add, these schemes are Defined Benefit and the extra growth includes a CPI addition + 1.5%
Edited by Burwood on Saturday 23 October 14:49
Jasey_ said:
Burwood said:
Jasey_ said:
I have no idea how the NHS pension works and I'm guessing your earnings put you in the high rate tax band.
If I were a gambling man I'd say you're probably in line for a tax rebate.
If you don't have a colleague with a similar position who can help it could well be time for an accountant.
That said self assessment is pretty straight forward these days.
I'm afraid not. Add up the total 'Growth' figures. I see 29 and 24. The surplus over 40K allowance is added to your income and taxed! The OP has a tax bill to pay If I were a gambling man I'd say you're probably in line for a tax rebate.
If you don't have a colleague with a similar position who can help it could well be time for an accountant.
That said self assessment is pretty straight forward these days.
. You don't need an accountant if you can follow basic math.Edited to add, these schemes are Defined Benefit and the extra growth includes a CPI addition + 1.5%
Edited by Burwood on Saturday 23 October 14:49
Mihd you not surprised that 2 NHS pensions aren't aware of the existence of the other and they are trying to screw the tax man
.OP, if I were you, I would just contact Eric Mc and get him to sort it out for you, given you have no interest in finance and just want to get on with your family life.
If you are PAYE employed and have two pension funds then your part should be relatively straight forward: collect all your annual P60 forms together with your NHS annual pension statement.
Let the accountant do the rest of the work for you and provide guidance going forwards. As others have said, you probably are close to LTA (lifetime allowance) and tax gets punitive at that stage.
If you are PAYE employed and have two pension funds then your part should be relatively straight forward: collect all your annual P60 forms together with your NHS annual pension statement.
Let the accountant do the rest of the work for you and provide guidance going forwards. As others have said, you probably are close to LTA (lifetime allowance) and tax gets punitive at that stage.
Thanks for everyones advice, the 'pot' currently stands at £370k but am not 40 yet, so in another 25 years+ of ongoing contributions + growth am pretty sure it's got a good chance of going over the LTA limit.
P60s, I always wonder what those are for, at least these days with electronic payslips it should all be online.
P60s, I always wonder what those are for, at least these days with electronic payslips it should all be online.
Gassing Station | Finance | Top of Page | What's New | My Stuff