Tax return time

[Gavster]

Hhhhmph... 99% there but their calculation isn't giving a tax free allowance on the rent-a-room scheme, even though I've indicated that I wish to claim it. Goddamn it, I'll need to face the call centre on Monday morning this is why it's better to complete tax returns early in the tax year

[DeskJockey]

Will they though? The threat has been made many times over, but on the whole it hasn't, AFAIK, happened. Precisely because their kids are en good schools, they've got friends and family nearby, they have a social life here, etc. Uprooting your family is not a small thing to do, having to start all over somewhere else. And if you're not wealthy enough to be financially independent then you also need to find jobs.

From my experience of moving as a single person within the EU, the thought of moving my entire family to somewhere outside it (ignoring for a moment that we'd most likely move to Denmark if we did, and that taxes there are at least the same as here) would not be undertaken lightly.

No doubt the UK tax system could do with reform, but it wouldn't be that that drove me to move.

[GG.]

Will they though? The threat has been made many times over, but on the whole it hasn't, AFAIK, happened. Precisely because their kids are en good schools, they've got friends and family nearby, they have a social life here, etc. Uprooting your family is not a small thing to do, having to start all over somewhere else. And if you're not wealthy enough to be financially independent then you also need to find jobs.

From my experience of moving as a single person within the EU, the thought of moving my entire family to somewhere outside it (ignoring for a moment that we'd most likely move to Denmark if we did, and that taxes there are at least the same as here) would not be undertaken lightly.

No doubt the UK tax system could do with reform, but it wouldn't be that that drove me to move.

If you were at a level where you were being punitively taxed I’m sure you’d see things differently. Part of that is not just the tax level (as I mentioned above) but the inequitable nature in how it is applied - e.g. very little taxation of wealth but heavy taxation on income.

Pensions are a great example - why not let the lifetime cap do the heavy lifting of making sure people can’t benefit excessively from the tax breaks - why is it fair if I earned more much later in life than someone contributing lower over longer that I would get disproportionately penalised?

Why can you be a retired millionaire but get a state pension when younger people will have it pushed back further and further irrespective of wealth?

Why tax houses on purchase price versus capital gains if you’ve made hundreds of thousands in profits?

Why are nuclear families penalised through the tax system by withdrawal of child benefit if one person is a higher rate taxpayer but little to no transfer of benefits between coupes such as pension allowances?

Basically the tax system is an inexcusable mess and needs to be ripped apart and looked at from scratch

[DeskJockey]

I don't disagree about the tax system at all. But I don't think it would be enough it the key factor in a decision about moving. My wife is likely to fall victim to the crazy pensions taxation if we're not careful, but I can't see her deciding to leave the UK.

I think that holds true for most.

[GG.]

I don't disagree about the tax system at all. But I don't think it would be enough it the key factor in a decision about moving. My wife is likely to fall victim to the crazy pensions taxation if we're not careful, but I can't see her deciding to leave the UK.

I think that holds true for most.

Certainly is true for most I agree. Unfortunately tax take is hyper concentrated with the top 1 per cent. paying 28 per cent. of all income tax. Even if you lose a few thousand of those taxpayers it will start to really hurt the UK.

[Simon]

If you were at a level where you were being punitively taxed I’m sure you’d see things differently. Part of that is not just the tax level (as I mentioned above) but the inequitable nature in how it is applied - e.g. very little taxation of wealth but heavy taxation on income.

Pensions are a great example - why not let the lifetime cap do the heavy lifting of making sure people can’t benefit excessively from the tax breaks - why is it fair if I earned more much later in life than someone contributing lower over longer that I would get disproportionately penalised?

Completely agree. Or... why have a lifetime allowance at all? Pensioners still pay income tax on their pension income; and the lifetime allowance has wrecked havok on many NHS consultants who are retiring early to avoid the 55% charge. Just bin it off.

Why can you be a retired millionaire but get a state pension when younger people will have it pushed back further and further irrespective of wealth?

The state pension is a social contract - you can't have people paying in for 40+ years and then being rug pulled before they can claim because they're 'too wealthy'. The issue is that governments around the world were too slow to raise the retirement age - the baby boomers should've already been retiring later. My great aunt was retired for 37 years before she died. She retired at 58 years old and died at 95. That's crazy, and she died back in 2007. You just have to have a state pension for all.

Why tax houses on purchase price versus capital gains if you’ve made hundreds of thousands in profits?

Because it's not profit. Likely, if you're moving up, the next house has increased by even more in price than your current one. The only people who profit are those with BTLs etc, or those downsizing at retirement.

Why are nuclear families penalised through the tax system by withdrawal of child benefit if one person is a higher rate taxpayer but little to no transfer of benefits between coupes such as pension allowances?

Yup. It's crazy that we evaluate household income when claiming benefits but only individuals for taxation. We need a similar notion to the US where you can 'joint file' - file taxes as a married couple. Baby boomers had both married couples tax relief and mortgage interest tax relief - both on much more affordable houses. I bet your parents don't mention that when they're talking about the (fleetingly brief) 15% interest rates.

Basically the tax system is an inexcusable mess and needs to be ripped apart and looked at from scratch

Word.

[Jobbo]

I’m not sure if any of you already follow Dan Neidle, former head of tax at Clifford Chance, but he now runs Tax Policy Associates: https://www.taxpolicy.org.uk/

As a business - aside from holding our public servants to account - he highlights particularly punitive areas of tax and comes up with genuine proposals for reform, with a dose of realism as to whether they will happen. Here’s a nice article which identifies the 90% rate of tax (and a higher rate in very specific circumstances): https://www.taxpolicy.org.uk/2022/10/04/marginal/

[V8Granite]

Wait til you go to pay it, their online system is slick as fuck - scam a QR code, open your online banking and pow - it's paid in seconds.

Over Christmas I was chatting with a website content/UX designer and he was explaining how the gov.uk domain is the envy of other governments around the world. Apparently, it's the slickest user experience of any country you'll find, from how to locate info, through to process like the one you described.

I have to deal with the Norwegian system and gov.U.K. Is a breath of fresh air.

Dave!

[V8Granite]

That reminds me, after my tax return they said they owed me £8500, my wife does my tax return and explained they had calculated it wrong, I pay no U.K. tax (I just have to declare overseas earnings) so cannot get a refund.

They disagreed and put the money in my account, so I opened a seperate account and put it in, thinking a tiny bit of interest can’t hurt. Lots of arguing over a month and eventually get to a department who say you fucked up by taking it (we didn’t take it, it was deposited) and despite multiple emails, cases being raised and proof we never wanted it, I had a £75 fine to pay and had to send it back.

Their argument was basically, yeah we are the tax man, we don’t make mistakes, we are dining you

Dave!

[mikeyb]

Noob question, do I need to bother to do a self assessment if I receive a very small dividend payout (40 whole pounds!) on top of my normal PAYE (This suggests it's tax free, but I dunno if that means I don't still have to fill something in)?

Technically you need to Duncs, but I wouldn't bother. The tax-free dividend allowance covers that level of income so there'd be no tax to pay on it.

[duncs500]

Noob question, do I need to bother to do a self assessment if I receive a very small dividend payout (40 whole pounds!) on top of my normal PAYE (This suggests it's tax free, but I dunno if that means I don't still have to fill something in)?

Technically you need to Duncs, but I wouldn't bother. The tax-free dividend allowance covers that level of income so there'd be no tax to pay on it.

Would they fine me or anything for not doing it I guess is the one thing I don't know?

I was also thinking of making a claim against my business mileage, we get a basic mileage rate (varies but 10-15p/mile) but I believe I'd be entitled to something back for that too? I think there's a separate system specifically for that, but I don't know whether it's easy to do as part of the general self assessment or you always do it through the separate system? Anyone know?

[Rich B]

Noob question, do I need to bother to do a self assessment if I receive a very small dividend payout (40 whole pounds!) on top of my normal PAYE (This suggests it's tax free, but I dunno if that means I don't still have to fill something in)?

Technically you need to Duncs, but I wouldn't bother. The tax-free dividend allowance covers that level of income so there'd be no tax to pay on it.

Would they fine me or anything for not doing it I guess is the one thing I don't know?

I was also thinking of making a claim against my business mileage, we get a basic mileage rate (varies but 10-15p/mile) but I believe I'd be entitled to something back for that too? I think there's a separate system specifically for that, but I don't know whether it's easy to do as part of the general self assessment or you always do it through the separate system? Anyone know?

I've claimed mileage back before when I was on a similar scheme, get all the figures together for how many miles you've done each year and call HMRC. It'll take you an hour to get through, but they'll talk you through it.

[JonMad]

Technically you need to Duncs, but I wouldn't bother. The tax-free dividend allowance covers that level of income so there'd be no tax to pay on it.

Would they fine me or anything for not doing it I guess is the one thing I don't know?

I was also thinking of making a claim against my business mileage, we get a basic mileage rate (varies but 10-15p/mile) but I believe I'd be entitled to something back for that too? I think there's a separate system specifically for that, but I don't know whether it's easy to do as part of the general self assessment or you always do it through the separate system? Anyone know?

I've claimed mileage back before when I was on a similar scheme, get all the figures together for how many miles you've done each year and call HMRC. It'll take you an hour to get through, but they'll talk you through it.

I've done that through self assessment. You need to know how many miles you did in the financial year plus your rates you were paid. Then you can claim tax back on the difference between that and a standard HMRC rate. e.g. HMRC say 45p/mile but you get paid 15p/mile. You can claim tax back on 30p/mile

[mikeyb]

Noob question, do I need to bother to do a self assessment if I receive a very small dividend payout (40 whole pounds!) on top of my normal PAYE (This suggests it's tax free, but I dunno if that means I don't still have to fill something in)?

Technically you need to Duncs, but I wouldn't bother. The tax-free dividend allowance covers that level of income so there'd be no tax to pay on it.

Would they fine me or anything for not doing it I guess is the one thing I don't know?

I was also thinking of making a claim against my business mileage, we get a basic mileage rate (varies but 10-15p/mile) but I believe I'd be entitled to something back for that too? I think there's a separate system specifically for that, but I don't know whether it's easy to do as part of the general self assessment or you always do it through the separate system? Anyone know?

I don’t think there would be a fine. They would primarily look to claim tax not paid, along with any late payment interest. As your dividend income is below the allowance, there’s no tax to pay and no therefore no interest.
As Rich said below, there’s a separate method to claim the statutory mileage rate. I can’t recall what it is off the top of my head- a quick Google should find it (I’m a chartered accountant but it’s been a long time since I ‘got my hands dirty’ filing returns )

ETA- it’s form P87 you need:
https://www.gov.uk/guidance/claim-incom ... penses-p87

[Jobbo]

Do they keep sending these pro-forma reminders to you after you submit the return even if you pay straight away?

[dinny_g]

I got a reminder this morning so I logged in to pay and it says I don't owe anything...

Even thought I owe about £1k - it said so at the just before I submitted my return - so I now have to find the time to sit on hold for 2 to 3 hours to speak with someone...

HMRC are bloody useless...

Edit - now a txt to join the e-mail. Still nothing to pay though...

[Jobbo]

Christ, two e-mails and a text today. Almost as bad as the tv licensing people.

[GG.]

Christ, two e-mails and a text today. Almost as bad as the tv licensing people.

Same for me. Will be making the payment probably tomorrow so hopefully they'll stop then!!

[IanF]

Filed mine today.. off out to the preview evening at a restaurant in Mayfair and found some sneakers I like so the refund I’m owed has already been spent!

[Ascender]

HMRC managed to "mis-allocate" a couple of quarter's VAT payments from about 18 months ago. I started getting letters from them about 6 months ago and ended up on the phone to them for about an hour where they managed to find them. Of course, I'm still getting the letters saying they're overdue and the usual threats of debt recovery etc. I called them last week to ask how long it could take for them to correctly allocate the money as I was told it would take 44 days and it's clearly not been done.

Of course, when I called, they asked if I was "calling to make a payment for the overdue amount?" as there were no notes on the account. Back to square one.

At the end of the call I was told I could just ignore the letters if they continue, as the funds should be allocated correctly within the next few months. Unfortunately they weren't able to provide me with any confirmation I had made the payments and they also couldn't tell me when I should stop ignoring the letters either (i.e. they still haven't allocated the money and I should really get in touch with them again).

That said, their personal system seems to work ok so that's something.