Tax return advice please
Discussion
The government have dragged a few of us PAYE monkeys into doing Self Assessment due to the Child Benefit.
Last year I earnt 54 grand according to my P60 so will lose 40 percent of the CB.
However I can offset, I believe pension contributions and Cycle to Work payments, which, for me total £3400, however I am not sure
where to put the figures in on the Tax Return, if I know it off the income section it tells me I would get a refund of £1200 or so which
cant be right, I cant seem to find anywhere to enter these figures ?
Last year I earnt 54 grand according to my P60 so will lose 40 percent of the CB.
However I can offset, I believe pension contributions and Cycle to Work payments, which, for me total £3400, however I am not sure
where to put the figures in on the Tax Return, if I know it off the income section it tells me I would get a refund of £1200 or so which
cant be right, I cant seem to find anywhere to enter these figures ?
The tax relief available for pension contributions can be tricky as there are various permutations on how the relief is given.
You can really only claim extra tax relief on a pension if YOU are making the contributions out of your already taxed income.
Regarding cycle to work, are YOU making any contributions for that or is it entirely paid for by your employer?
If it is, is it paid through a salary sacrifice scheme and is the £54,000 Gross Salary you are quoting the figure before or after any amounts paid regarding pensions or bicycles?
You can really only claim extra tax relief on a pension if YOU are making the contributions out of your already taxed income.
Regarding cycle to work, are YOU making any contributions for that or is it entirely paid for by your employer?
If it is, is it paid through a salary sacrifice scheme and is the £54,000 Gross Salary you are quoting the figure before or after any amounts paid regarding pensions or bicycles?
Yeah, realise it is just the three months, it is about £700,
The tips against the income field show this,
"The figure entered here is the pay figure after any contributions to your employer's pension scheme (sometimes described as superannuation). Take care when copying this figure from your P60."
I tried the Online calculator which says to put in your income and has boxes for CTW and pension contributions, it says I owe them £73 whcih I would think it about right, seems pretty unambiguous that pension contributions and CTW are included, plus all the ariticles online seem to say the same, i.e. that you can, if not over 60 grand use these to cut your bill down.
Just doesnt seem right that if I put the reduced figure in as per the advice it says I would get a £1200 refund.
Cycle to work, like pension is taken by the employer.
I am sure they could have done a better job of this, it is overly complicated, dotn want to get it wrong and get a refund as I know they will come after it five years down the line.
The tips against the income field show this,
"The figure entered here is the pay figure after any contributions to your employer's pension scheme (sometimes described as superannuation). Take care when copying this figure from your P60."
I tried the Online calculator which says to put in your income and has boxes for CTW and pension contributions, it says I owe them £73 whcih I would think it about right, seems pretty unambiguous that pension contributions and CTW are included, plus all the ariticles online seem to say the same, i.e. that you can, if not over 60 grand use these to cut your bill down.
Just doesnt seem right that if I put the reduced figure in as per the advice it says I would get a £1200 refund.
Cycle to work, like pension is taken by the employer.
I am sure they could have done a better job of this, it is overly complicated, dotn want to get it wrong and get a refund as I know they will come after it five years down the line.
Edited by J4CKO on Sunday 19th January 15:04
Get an accountant.
The British tax system is complex and even a person who is mainly taxed under PAYE will not generally be able to complete a tax return 100% accurately - unless their affairs are so straightforward that they shouldn't really have to complete a tax form in the first place.
The important thing to consider about pension reliefs is "who is paying the contribution". If the employer is making the contribution, then you can't claim any relief.
If YOU are making the contribution, then YOU are entitled to the tax relief.
If the contribution you make is deducted from your Gross Salary BEFORE PAYE is calculated, you are receiving all the tax relief you are going to get and there is no reason to enter the contribution on the return.
Also, in this situation, the Gross Salary you enter on the return is the Gross AFTER the pension has been deducted but BEFORE any PAYE or NIC has been deducted. This is also the Gross Salary figure used when deciding if you are over the magic £50,000 limit for Child Benefit clawback.
If you are making the pension contribution AFTER all the PAYE and NIC has been calculated, then you are entitled to tax relief at the higher rate of tax and you WILL need to enter the pension details on the tax return.
Once HMRC have this pension information they MAY refund you tax through the self assessment system OR they may adjust your following year's PAYE tax coding to give you the tax relief for the previous year.
Yes, it is messy - because British tax is messy.
The British tax system is complex and even a person who is mainly taxed under PAYE will not generally be able to complete a tax return 100% accurately - unless their affairs are so straightforward that they shouldn't really have to complete a tax form in the first place.
The important thing to consider about pension reliefs is "who is paying the contribution". If the employer is making the contribution, then you can't claim any relief.
If YOU are making the contribution, then YOU are entitled to the tax relief.
If the contribution you make is deducted from your Gross Salary BEFORE PAYE is calculated, you are receiving all the tax relief you are going to get and there is no reason to enter the contribution on the return.
Also, in this situation, the Gross Salary you enter on the return is the Gross AFTER the pension has been deducted but BEFORE any PAYE or NIC has been deducted. This is also the Gross Salary figure used when deciding if you are over the magic £50,000 limit for Child Benefit clawback.
If you are making the pension contribution AFTER all the PAYE and NIC has been calculated, then you are entitled to tax relief at the higher rate of tax and you WILL need to enter the pension details on the tax return.
Once HMRC have this pension information they MAY refund you tax through the self assessment system OR they may adjust your following year's PAYE tax coding to give you the tax relief for the previous year.
Yes, it is messy - because British tax is messy.
Edited by Eric Mc on Sunday 19th January 15:34
J4CKO said:
The government have dragged a few of us PAYE monkeys into doing Self Assessment due to the Child Benefit.
Last year I earnt 54 grand according to my P60 so will lose 40 percent of the CB.
However I can offset, I believe pension contributions and Cycle to Work payments, which, for me total £3400, however I am not sure
where to put the figures in on the Tax Return, if I know it off the income section it tells me I would get a refund of £1200 or so which
cant be right, I cant seem to find anywhere to enter these figures ?
Have a read of this:Last year I earnt 54 grand according to my P60 so will lose 40 percent of the CB.
However I can offset, I believe pension contributions and Cycle to Work payments, which, for me total £3400, however I am not sure
where to put the figures in on the Tax Return, if I know it off the income section it tells me I would get a refund of £1200 or so which
cant be right, I cant seem to find anywhere to enter these figures ?
http://www.hmrc.gov.uk/adjustednetincome/
BTW it doesn't mention any deduction for Cycle to Work payments.
There is no entry on your TR - it is needed so you can answer whether your earnings exceed £50k and hence you are subject to the clawaback.
David
sumo69 said:
J4CKO said:
The government have dragged a few of us PAYE monkeys into doing Self Assessment due to the Child Benefit.
Last year I earnt 54 grand according to my P60 so will lose 40 percent of the CB.
However I can offset, I believe pension contributions and Cycle to Work payments, which, for me total £3400, however I am not sure
where to put the figures in on the Tax Return, if I know it off the income section it tells me I would get a refund of £1200 or so which
cant be right, I cant seem to find anywhere to enter these figures ?
Have a read of this:Last year I earnt 54 grand according to my P60 so will lose 40 percent of the CB.
However I can offset, I believe pension contributions and Cycle to Work payments, which, for me total £3400, however I am not sure
where to put the figures in on the Tax Return, if I know it off the income section it tells me I would get a refund of £1200 or so which
cant be right, I cant seem to find anywhere to enter these figures ?
http://www.hmrc.gov.uk/adjustednetincome/
BTW it doesn't mention any deduction for Cycle to Work payments.
There is no entry on your TR - it is needed so you can answer whether your earnings exceed £50k and hence you are subject to the clawaback.
David
https://www.gov.uk/child-benefit-tax-calculator/ma...
As do many blogs and newspaper articles.
Will see what comes back from them.
Eric Mc said:
Get an accountant.
This 1000% Last year I made a complete balls of my Tax Return because I tried scrimping and doing it myself and had to re-do it. I got it in, in the nick of time but I was a quivering wreck.
The stress just isn't worth it and of course if its late.....
Best thing I ever did was get an accountant, He is more than paying for himself and worth every penny. If your return is straight forward it shouldn't be expensive. I'd say easy less than a couple hundred quid.
Your Wilmslow way aren't you?
Let me know and i'll forward a very good accountant, I dont use him as i'm not living up North any more but he come very well recommended.
PM me if your interested.
Won't your P60 show gross taxable pay - i.e. items such as Cycle to Work will be on top of that as they are not part of taxable pay but a deduction from pay before tax is applied?
Similarly pension contributions. It does vary as Eric says but, in many cases, pension contributions are deducted from pay and paid gross to the pension scheme so don't need to be included on your tax return at all.
Similarly pension contributions. It does vary as Eric says but, in many cases, pension contributions are deducted from pay and paid gross to the pension scheme so don't need to be included on your tax return at all.
CHIEF said:
Eric Mc said:
Get an accountant.
This 1000% Last year I made a complete balls of my Tax Return because I tried scrimping and doing it myself and had to re-do it. I got it in, in the nick of time but I was a quivering wreck.
The stress just isn't worth it and of course if its late.....
Best thing I ever did was get an accountant, He is more than paying for himself and worth every penny. If your return is straight forward it shouldn't be expensive. I'd say easy less than a couple hundred quid.
Your Wilmslow way aren't you?
Let me know and i'll forward a very good accountant, I dont use him as i'm not living up North any more but he come very well recommended.
PM me if your interested.
You are making three great assumptions -
1) you will understand what it says on the HMRC website
ii) what it says on the HMRC is complete
iii) what it says on the HMRC is correct
Notwithstanding that i) is a given (on the basis that all PHers are exceptionally intelligent and financially astute), points ii) and iii) are by no means guaranteed.
1) you will understand what it says on the HMRC website
ii) what it says on the HMRC is complete
iii) what it says on the HMRC is correct
Notwithstanding that i) is a given (on the basis that all PHers are exceptionally intelligent and financially astute), points ii) and iii) are by no means guaranteed.
Eric Mc said:
You are making three great assumptions -
1) you will understand what it says on the HMRC website
ii) what it says on the HMRC is complete
iii) what it says on the HMRC is correct
Notwithstanding that i) is a given (on the basis that all PHers are exceptionally intelligent and financially astute), points ii) and iii) are by no means guaranteed.
All fair points Eric.1) you will understand what it says on the HMRC website
ii) what it says on the HMRC is complete
iii) what it says on the HMRC is correct
Notwithstanding that i) is a given (on the basis that all PHers are exceptionally intelligent and financially astute), points ii) and iii) are by no means guaranteed.
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