100k self assessment?
Discussion
"To work this out, add up all your income - for example, salary before tax, taxable benefits (such as a company car), and income from investments or pensions."
They are not very clear on this are they?
I've always taken it to mean:
taxable salary (i.e. net after any salary sacrifice / pension)
plus taxable benefits (health, dental, company car, anything else with a BIK)
plus interest on bank accounts
plus other income sources (property letting, air bnb etc).
There are more considerations but nothing impacting my personal situation and most of the above doesn't apply to me either.
They are not very clear on this are they?
I've always taken it to mean:
taxable salary (i.e. net after any salary sacrifice / pension)
plus taxable benefits (health, dental, company car, anything else with a BIK)
plus interest on bank accounts
plus other income sources (property letting, air bnb etc).
There are more considerations but nothing impacting my personal situation and most of the above doesn't apply to me either.
Mr Pointy said:
Aren't you going to have to do an SA return anyway to claim the additional pension tax relief?
even if you are just close to the £100k limit you will have a benefit for claiming the pension relief anyway (assuming you pay into a pension)used to be worth £2-3k a year to me.
CheesecakeRunner said:
According to https://www.gov.uk/self-assessment-tax-returns/who... you need to register for Self Assessment and do a return if
“you earned £100,000 or more”
Someone once pointed out that there is no statute behind this. “you earned £100,000 or more”
So I looked on that uk gov. website and the links it referenced, and could find none either.
Does anyone know of any UK statute that requires a self assessment form to be filled out?
The same source also pointed out that the wording of the self assessment, if you filled it in and sent it back, becomes a contract that you signed, and an additional oath that all was correct, and they the person was responsible for any mistakes or fraud, and liable for punishment. I.e. you bury yourself.
IF, there is no statute, it seems an odd form to voluntarily fill in. hence the question: does anyone know of any statute that makes it a legal requirement upon a person ?
CheesecakeRunner said:
According to https://www.gov.uk/self-assessment-tax-returns/who... you need to register for Self Assessment and do a return if
“you earned £100,000 or more”
Is that if your total package is over 100k or if your gross income after salary sacrifice deductions, pension, etc, is over 100k.
I’m up to speed on the loss of personal allowance over 100k, just trying to figure out if I need to do a return for the first time this year thanks to a promotion.
Depends what you mean by total package…“you earned £100,000 or more”
Is that if your total package is over 100k or if your gross income after salary sacrifice deductions, pension, etc, is over 100k.
I’m up to speed on the loss of personal allowance over 100k, just trying to figure out if I need to do a return for the first time this year thanks to a promotion.
If you’re on £95k, say, sacrificing 10% to pension, but get a 15k bonus I reckon your earnings in total are 100.5k and you’d need to do a return. 14k bonus and your earnings for the year would be under the 100k threshold.
That’s due to the salary sacrifice pension contribution. If it was a “normal” pension deduction that didn’t reduce your earnings then I think you’d have to do a return in either of the above scenarios.
I could be wrong, mind you! First time I had to do one was a few years ago, but my earnings (including bonus) put me over the 100k line even with salary sacrifice pension so I’ve not been an edge case and needing to check that the above is right. But, it feels right based on the info I’ve had to fill in.
Be prepared for a few years of owing tax from the previous year, if my experience is anything to go by. PAYE sorts out the general tax code / loss of allowance thing, but bonus is variable (at least for me!) and the additional loss of allowance isn’t catered for by my company or HMRC when it’s paid, so I always find I owe money. At some point my base level earnings will be above £125k even with pension contributions and it’ll settle down again, but it’s somewhat annoying at the moment. First world problems, etc.
CheesecakeRunner said:
Give I have no other considerations such as investments or other income, is it as simple as whatever the gross income figure is on my P60?
Thread had progressed while I was typing!The above is my understanding, having filled in the form.
I have a nagging feeling HMRC wrote to me to ask me to complete one, now I think about it - presumably based on my PAYE information.
It’s 100k or more “taxable” income, so after any legitimate deductions (pension/salary sacrifice).
You have reminded me that I need to do mine for the last tax year (thankfully my financial affairs are pretty simple).
I will also be into the new 45% band which, after paying 60% tax on the top part of my earnings has tipped me over the edge and I’m going to to start sacrificing salary to reduce my tax bill.
We’re all fortunate people (and work hard to maintain that privilege), but it does now feel like the government is actively taking the piss..!
You have reminded me that I need to do mine for the last tax year (thankfully my financial affairs are pretty simple).
I will also be into the new 45% band which, after paying 60% tax on the top part of my earnings has tipped me over the edge and I’m going to to start sacrificing salary to reduce my tax bill.
We’re all fortunate people (and work hard to maintain that privilege), but it does now feel like the government is actively taking the piss..!
Edited by OMITN on Wednesday 21st December 11:35
OMITN said:
it does now feel like the government is actively taking the piss..!
Perhaps, but I still haven't found any government act that tells a person to fill in a self assessment.So I can't blame the government
Maybe it's just the drones at HMRC, which is I think a separate corporation, asking, and being given?
If you have professional certs/subs to pay, and work from home, or any qualifying charitable donations you can claim tax relief on those via self assessment.
Plus obviously any SIPP contributions made from net payroll, i.e. outside of salary sacrifice - probably worth chucking a wedge of bonus in.
Its worth getting into the habit, IMO, of doing a mini self assessment of your potential projected tax liability for the whole year even if on PAYE and especially if you get bonus etc pushing into that 100-125 band, at various points through the year, say 6 months into a tax year and then 3 months before the end so you can push more into SIPP if needed and minimise unwelcome attention and meddling from HMRC.
Plus obviously any SIPP contributions made from net payroll, i.e. outside of salary sacrifice - probably worth chucking a wedge of bonus in.
Its worth getting into the habit, IMO, of doing a mini self assessment of your potential projected tax liability for the whole year even if on PAYE and especially if you get bonus etc pushing into that 100-125 band, at various points through the year, say 6 months into a tax year and then 3 months before the end so you can push more into SIPP if needed and minimise unwelcome attention and meddling from HMRC.
Globs said:
Someone once pointed out that there is no statute behind this.
So I looked on that uk gov. website and the links it referenced, and could find none either.
Does anyone know of any UK statute that requires a self assessment form to be filled out?
The same source also pointed out that the wording of the self assessment, if you filled it in and sent it back, becomes a contract that you signed, and an additional oath that all was correct, and they the person was responsible for any mistakes or fraud, and liable for punishment. I.e. you bury yourself.
IF, there is no statute, it seems an odd form to voluntarily fill in. hence the question: does anyone know of any statute that makes it a legal requirement upon a person ?
There is no statutory level of income which dictates whether a self assessment tax return is required.So I looked on that uk gov. website and the links it referenced, and could find none either.
Does anyone know of any UK statute that requires a self assessment form to be filled out?
The same source also pointed out that the wording of the self assessment, if you filled it in and sent it back, becomes a contract that you signed, and an additional oath that all was correct, and they the person was responsible for any mistakes or fraud, and liable for punishment. I.e. you bury yourself.
IF, there is no statute, it seems an odd form to voluntarily fill in. hence the question: does anyone know of any statute that makes it a legal requirement upon a person ?
The obligation comes from the requirement that the taxpayer has to ensure they pay the correct tax (note it's the taxpayer's responsibility - not their employer's nor is it HMRC's).
Therefore,if a taxpayer is NOT paying the correct tax (either too much or too little), they should consider whether completing a Self Assessment tax (SATR) return might be the best way of ensuring that their tax affairs for each tax year are correct.
If your issue is a PAYE issue, you MAY be able to sort the problem out by contacting HMRC directly and explaining the situation to them. In theory, people on PAYE should not have to comple SA returns. However, tax is now so complicated with so many permutations, bands, rates, restrictions, allowances etc often completing an SA return is often the best way of resolving a situation.
HMRC plans to abolish Self Assessment at some point. It was supposed to have been 2018, then 2023 and then 2024. It's now POSSIBLY 2026 but I reckon SA will be around for a long time.
Eric Mc said:
The obligation comes from the requirement that the taxpayer has to ensure they pay the correct tax (note it's the taxpayer's responsibility - not their employer's nor is it HMRC's).
Thanks, yes that makes sense. I wonder why that's not mentioned on the website, with a link to the relevant act, and the definitions of 'taxpayer', 'person' etc. Perhaps because if a man doesn't fill in the self assessment form, creating contract and oath, there's no obligation to pay, and no proof of claim.
Any statute must therefore come back to the yearly 'budget', which is voted through each april. The budget seems to be a yearly renewal of an old tax for the Napoleonic wars from 1799, restarted in 1803 but thrown out again by 1815, but re-introduced in 1842 to service a debt ridden government, a parasite even back then
.Arguably it's unsupported by superior statues from 1688 and 1700, but that's a different argument. In reality, today, the albanians need our help, zelensky's property portfolio doesn't pay for itself, and we need the zero carbon world that no one voted for
Globs said:
Eric Mc said:
The obligation comes from the requirement that the taxpayer has to ensure they pay the correct tax (note it's the taxpayer's responsibility - not their employer's nor is it HMRC's).
Thanks, yes that makes sense. I wonder why that's not mentioned on the website, with a link to the relevant act, and the definitions of 'taxpayer', 'person' etc. Perhaps because if a man doesn't fill in the self assessment form, creating contract and oath, there's no obligation to pay, and no proof of claim.
Any statute must therefore come back to the yearly 'budget', which is voted through each april. The budget seems to be a yearly renewal of an old tax for the Napoleonic wars from 1799, restarted in 1803 but thrown out again by 1815, but re-introduced in 1842 to service a debt ridden government, a parasite even back then
.Arguably it's unsupported by superior statues from 1688 and 1700, but that's a different argument. In reality, today, the albanians need our help, zelensky's property portfolio doesn't pay for itself, and we need the zero carbon world that no one voted for
I Googled self assessment legal framework and found this: https://www.gov.uk/hmrc-internal-manuals/self-asse...
link said:
This guide to the legal framework is an up-date of what was ‘Self Assessment Technical 2: Self Assessment: the legal framework’, commonly referred to as ‘SAT 2’. The original SAT 2 was written in 1994 (and updated in 1995) to introduce the new Self Assessment scheme. Legislation to pave the way for the change, from HMRC assessing taxpayers to a scheme of self assessment, was included in the 1994 Finance Act. The legislation laying down the procedures for income tax Self Assessment (SA) is in Taxes Management Act 1970 (TMA).
I’m no expert (and am not even interested, particularly) but I suppose you could go digging through the acts mentioned above.The word "self" in "self assessment" is the key. The change to self assessment meant that the legal obligation to calculate the correct level of income tax switched from the Inland Revenue (as it was back then) to the tax payer.
The unfair aspect of this is that most tax payers are not really qulaified or knowledgeable enough to know whether they really are paying the correct tax.
In fact, I would suggest that no single person in the UK is genuinely knowledgeable enough to be able to know everything about UK tax as we have a very large and complicated tax code. Indeed, since self assessment was introduced in 1994/95 the tax code has only become even more complicated.
The unfair aspect of this is that most tax payers are not really qulaified or knowledgeable enough to know whether they really are paying the correct tax.
In fact, I would suggest that no single person in the UK is genuinely knowledgeable enough to be able to know everything about UK tax as we have a very large and complicated tax code. Indeed, since self assessment was introduced in 1994/95 the tax code has only become even more complicated.
Re. complication of UK tax, I remember seeing the shelf at my father's office that held the UK tax code. (He was a solicitor.). It went from being a few large books to occupying the entire shelf. This was back in the 1990s. For all the calls for a "red tape bonfire", I imagine it would now be a couple of shelves.
Harpoon said:
Eric Mc said:
And they plan to abolish it.
In my ignorance, how can they abolish it? Or what can replace it?It was anounced with great fanfair by Chancellor George Osborne (remember him) as the "abolition of the annual tax return".
Of course, it will most likely never happen - see the major announcement by the Secretary for the Treasury on Monday.
HMRC has massive changes planned for the UK tax system over the next few years. They are so massive that the mainstream media are ignoring telling taxpayers about them. It's only us specialists who seem to be aware that all this enormous change is going on.
DanL said:
I’m no expert (and am not even interested, particularly) but I suppose you could go digging through the acts mentioned above.
Thanks that's an interesting find. I looked up the Finance Act 1974 (section 179 has self essessment), which links back to the Taxes management Act 1970 section 8, 'returns'.
It's interesting how long and complex these acts are, compared for example to the Act of Settlement 1700, that sort of says they can't do this
I found a few places where the above tax acts say you have to promise your self assessment / return is true - the oath I guess, and some issues if it's incorrect..
.. but I haven't found any mention of problems by simply not filling one in.
The whole concept appears to be one of self incrimination and sacrifice, for something we are simply unqualified to do correctly. It seems this situation, being over 50 years old - must be deliberate.
But I'll continue reading, thanks again for the link.
TBH life in 1842 sounded better, with income tax at 7d in the pound, although of course 1841 was 7% better
. I do wonder why people bother with tax TBH, the more people comply, the more complex it gets. The acts from 1970 and 1974 are huge - that's over 50 years ago The strange concept that governmental and council corporations think they are entitled to extract money by coercion, trickery and arguably illegal statute, is based on the arrogance that they are more entitled to our wealth than we are. Hence, I think, why we are all staring down the barrel of the biggest, totally avoidable, recession / depression in living memory. Ho hum...
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