Self Assessment Question

[thekingisdead]

with so much time at home I thought i'd get ahead of the game and submit my tax return for 19/20

Got a query that HMRC can't help with (online or by phone) due to reduced CV-19 manning levels:

My Personal Allowance was increased for 19/20 due to a re-bate owed for a SIPP contribution.

When i review my SA summary sheet for 19/20 (before submission) its showing my personal allowance as the standard 12500 - by my understanding I have increased tax to pay as by HMRC's calcs I've "underpaid" through PAYE. Therefore taking back the rebate from my SIPP contributions (confirmed by fag-packet calculations as my rental profit is broadly similar to previous years by tax owed by SA has increased significantly)

I can't see where I am supposed to account for a legitimate increase in personal allowance? Can anyone advise?

As a side note, I may refrain from paying HMRC through PAYE, system seems overly complicated as they owe me for SIPP contributions, and I owe them for previous years. Too complex for my non-accounting brain to keep track of.

[i4got]

Was your SIPP payment from your net salary? If so, then I assume the SIPP provider applied for and received the additional 20% from HMRC?

I assume you are a higher rate tax payer as you are completing a SA?

I'm not sure why your tax free allowance should change. If you fill in your SIPP contribution then the SA should calculate the additional 20% rebate you will receive. I've only ever received this directly into my bank or by cheque - I've never had a tax-free personal allowance change to handle it.

I'm no expert though so perhaps others have had the rebate via a tax code change.


(If your an additional-rate tax payer as opposed to higher rate then the 20% claimed through SA will be 25%)

[thekingisdead]

yes SIPP payment was from net salary.
Re-bate is owed as am / was a higher rate tax payer for that year.

For the last few years I've always had personal allowance adjusted for the SIPP rebate. Would prefer a cheque as it seems far simpler!

[i4got]

thekingisdead said:

yes SIPP payment was from net salary.
Re-bate is owed as am / was a higher rate tax payer for that year.

For the last few years I've always had personal allowance adjusted for the SIPP rebate. Would prefer a cheque as it seems far simpler!

So when you complete the SA (or tax calculator) and include the SIPP payment does it show you as being due a rebate? If so then I think it will come back to you as a one-off payment,. It always has for me.

[thekingisdead]

I've never been offered a rebate - always an alteration to my Personal Allowance :rolls eyes:

[Eric Mc]

You can ask HMRC for the actual money. If you complete self assessment tax returns, the default should be that you get a tax reduction or a refund through self assessment and they should leave your PAYE Tax Code alone.

[JBM78]

thekingisdead said:

with so much time at home I thought i'd get ahead of the game and submit my tax return for 19/20

Got a query that HMRC can't help with (online or by phone) due to reduced CV-19 manning levels:

My Personal Allowance was increased for 19/20 due to a re-bate owed for a SIPP contribution.

When i review my SA summary sheet for 19/20 (before submission) its showing my personal allowance as the standard 12500 - by my understanding I have increased tax to pay as by HMRC's calcs I've "underpaid" through PAYE. Therefore taking back the rebate from my SIPP contributions (confirmed by fag-packet calculations as my rental profit is broadly similar to previous years by tax owed by SA has increased significantly)

I can't see where I am supposed to account for a legitimate increase in personal allowance? Can anyone advise?

As a side note, I may refrain from paying HMRC through PAYE, system seems overly complicated as they owe me for SIPP contributions, and I owe them for previous years. Too complex for my non-accounting brain to keep track of.

Your tax calculation will always show a deduction of personal allowance of £12,500, as that is the personal allowance.

The amount of tax you've paid over the year was reduced due to your amended tax code.

This reduced tax figure is then used in the calculation of how much tax is due to be paid (or refunded) per your tax return.

I've probably not explained this very well, but main thing to note is that your tax calculation will always show the actual personal allowance of £12,500 no matter what your tax code is

[Eric Mc]

When entering your information on the return, you need to enter any tax amounts that were paid in the tax year that related to an earlier or a later tax year. Otherwise, you will falsely give yourself credit for tax paid in the year to which the tax return relates.

[thekingisdead]

JBM78 said:

Your tax calculation will always show a deduction of personal allowance of £12,500, as that is the personal allowance.

The amount of tax you've paid over the year was reduced due to your amended tax code.

This reduced tax figure is then used in the calculation of how much tax is due to be paid (or refunded) per your tax return.

I've probably not explained this very well, but main thing to note is that your tax calculation will always show the actual personal allowance of £12,500 no matter what your tax code is

this is the bit i don't understand. If my PAYE tax code is raised from 12500 (to refund tax due) if then for self assessment (of the same tax year) the standard personal allowance is used (12500) the calculation will show that i have underpaid tax (through PAYE). In effect wiping out the refund?

Or am i completely misunderstanding and i should pay for the services of an accountant?

EDIT: Just seen Eric Mc's post. Thats probably the bit I'm missing

Edited by thekingisdead on Thursday 16th April 08:28

[Eric Mc]

It's an easy thing to overlook. I don't use HMRC's website for entering self assessment information so am not sure exactly how you need to include such information. I use a proprietary software called Iris which is geared to accountants in practice.

On Iris, when entering the data, there is a box that needs to be completed sometimes which asks you to insert any tax collected under PAYE in the tax year for which the self assessment tax return relates but which was actually relates to a tax liability or refund in respect of an earlier (or sometimes later) tax year.

If appropriate, that box needs to be completed - or otherwise the tax calculation carried out for the tax year to which the self assessment tax return relates will either understate or overstate the tax liability for the self assessment tax year.

[thekingisdead]

Thank-you Eric.

The website isn't the best, IMO. But I use it circa once per year so maybe I'm always liable to find it a little confusing.

I think there's a survey at the start of the SA which dictates which forms you have to populate. I think I've not answered a question correctly about "tax from previous years" - therefore not getting an opportunity to fill in the correct information.
I'll delete this return and start again! At least i have time on my side! :-)

Thanks again.

[condor]

I thought I might do my tax return early too. I file my paper tax return usually in September.
However, this is the first year I haven't had the short self assessment form (SA200) sent to me . I've not received any form. I wonder if HMRC are not sending forms out in the hope that more people will file online or they're just too busy at the moment.
I thought I might try their webchat to ask them, but it's not available as they're all too busy. Anyone know?

[Eric Mc]

90% of self assessment taxpayer do not get paper tax returns anymore as they file online.

[condor]

No reason why they haven't sent me one then
I'm guessing that I'll have to ask for one to be sent - will leave it till when they're less busy/ post lockdown.

[Eric Mc]

Yes, they generally don't send out blank paper forms unless you specifically ask for one. Everybody else gets a letter reminding them that will need to submit a return by the end of the following January.

[condor]

Presumably HMRC know who fills out paper self assessments as they've always sent me one before. It's only this time they haven't, after sending me one the last 9 years.I usually get it the day after the 6th April.

[Mr-B]

condor said:

Presumably HMRC know who fills out paper self assessments as they've always sent me one before. It's only this time they haven't, after sending me one the last 9 years.I usually get it the day after the 6th April.

I think it's a gentle push to get everyone to file digitally and obviously saves them money by not sending a printed form, I believe you can print off a paper one and still submit that by the usual paper deadline.

ETA https://www.gov.uk/government/publications/self-as...

[Eric Mc]

condor said:

Presumably HMRC know who fills out paper self assessments as they've always sent me one before. It's only this time they haven't, after sending me one the last 9 years.I usually get it the day after the 6th April.

I think they are rather busy at the moment. You might have noticed that the Chancellor is announcing what amounts to mini budgets every second day.

[rfisher]

Love the way they claw back some flesh when you phone them.

20 mins of going through the automated menu, followed by them ending the call as they are busy.

Nice little earner.

[Somebody]

I have always filed paper returns, before 31st Oct each year. I think of it as a job creation scheme for some apprentice to enter the data into their system.