Tax return time

[Gavster]

Also decided to stop having lodger here, the freedom will be fantastic, but will miss that £7,500 per year tax-free income.

Do you not have to pay tax on the rent from
lodgers?

There's a rent-a-room scheme where the first £7,500 of income from a lodger is tax-free. It's hard to pass up because my spare bedroom rents for £700 a month (£8,400 per year).

[V8Granite]

Again my lovely wife has completed mine, it’s surprisingly painless that way

Dave!

[DeskJockey]

I owe them £215. That's acceptable.

[Explosive Newt]

£1700. Gah.

[Jobbo]

My on account payments were somewhat lower than actual tax due. It’s times like these that PAYE seems appealing

[GG.]

Ugh - making the balancing self assessment payment is on my to do list for today.

Add to that HMRC have concluded that there will be shortfall (which is true) for this tax year and have decided they’ll take £1300 a month until April to claw it back… need to call them about that!

[jamcg]

https://vm.tiktok.com/ZGdAvn6fE/

[Ascender]

Loving the almost-daily reminders by email and text to make sure I pay them as soon as possible.

[dinny_g]

£501 for me, mainly down to additional BIK from a new work provided critical illness policy I took out in the tax year.

[GG.]

£501 for me, mainly down to additional BIK from a new work provided critical illness policy I took out in the tax year.

Taxing you for BIK on critical illness protection is particularly cretinous isn't it. Its not exactly a company car or corporate gym membership. At least the policy itself should be exempt from IPT.

I always think its funny that interventionist governments of all stripes are obsessed with "nudge" taxation to discourage people from doing things they don't want you to do but never a tax "break" to encourage you to act prudently. I say break in inverted commas because clearly these are not things which should be taxed if you have grey matter between your ears so not taxing it is not in any sensible person's mind a tax break.

[dinny_g]

Yeah but I pay far less than going market rate and don’t need to dick about with medical etc…

It’s win win for me really.

[GG.]

Yeah but I pay far less than going market rate and don’t need to dick about with medical etc…

It’s win win for me really.

Yes I'm sure its still worth it but taxing a policy which provides protection for you and your family if you get a terminal or other severe illness is immoral.

[Jobbo]

Yeah but I pay far less than going market rate and don’t need to dick about with medical etc…

It’s win win for me really.

Yes I'm sure its still worth it but taxing a policy which provides protection for you and your family if you get a terminal or other severe illness is immoral.

You're taxed on the value of it if you were to pay for it yourself, not on the subject matter of the policy. I guess if it was key man insurance for the business it wouldn't be a benefit in kind.

[dinny_g]

Yeah but it's a bug bear of the "Very slightly better off than average but far from rich" .

I spend a lot of money each month ensuring that in time, my burden to the state will be as small as possible. Mortgage, Pensions, medical coverage, various life insurance and death in service policies. I pay these and in tax where appropriate.

But according to some, I have the shoulders to bear a bigger burden - but I pay more than enough already.

I guess if it was key man insurance for the business it wouldn't be a benefit in kind.

No, nothing like that - I mean come on. You've seen how I post here - if I ever become a Key Man, then God help the company.

It's just your common or garden Critical Illness policy - if unable to work, I get a lump sum (this is in addition to 40% of my salary to my Retirement Date)

[Jobbo]

It's just your common or garden Critical Illness policy - if unable to work, I get a lump sum (this is in addition to 40% of my salary to my Retirement Date)

I appreciate that - it's a personal insurance to protect your family if the worst should happen. You can take it out yourself or choose not to; you can take it through work and maybe it's cheaper than paying for it yourself, but it's effectively just disguised salary. So it's not about the broad shoulders of those who can bear it - it's just taxed as if it were income and you bought it yourself outside work.

[dinny_g]

Oh no sorry, that isn't what I mean.

I know it's defiantly a taxable benefit and I'm happy to pay the tax on it - I'm happy to pay all of my tax liability to be honest (Medical Insurance, low interest loans etc)

I just mean in general when there is talk of tax increases, pension grabs etc.

[GG.]

Yeah but I pay far less than going market rate and don’t need to dick about with medical etc…

It’s win win for me really.

Yes I'm sure its still worth it but taxing a policy which provides protection for you and your family if you get a terminal or other severe illness is immoral.

You're taxed on the value of it if you were to pay for it yourself, not on the subject matter of the policy. I guess if it was key man insurance for the business it wouldn't be a benefit in kind.

Yes I appreciate that but my point is income protection or critical illness insurance should not be taxed like salary or a benefit you derive day to day use from. Its another example of money grubbing pettiness.

I also read your post above about disguised salary - again this is where I disagree, or at least with the use of the word disguised - it is not like you could just get paid all of your salary by way of insurance products (derivatives, perhaps...) so calling it disguised is a funny way to put. I am also sure if Dinny said I don't want that benefit please pay me it in cash, his firm would probably say no.

[IanF]

£460 refund, plus I already had some from last year, so just transferred over a grand back! Also, coincidentally just bought a new titanium Apple Watch

[Jobbo]

Yes I appreciate that but my point is income protection or critical illness insurance should not be taxed like salary or a benefit you derive day to day use from. Its another example of money grubbing pettiness.

I also read your post above about disguised salary - again this is where I disagree, or at least with the use of the word disguised - it is not like you could just get paid all of your salary by way of insurance products (derivatives, perhaps...) so calling it disguised is a funny way to put. I am also sure if Dinny said I don't want that benefit please pay me it in cash, his firm would probably say no.

Why is critical illness cover different from your home insurance, car insurance or life insurance, for instance? You have to pay for those out of taxed income. This has always been the case: you choose what to spend your taxed income on. It's not money-grabbing pettiness, and it doesn't change with the government either so it's not exactly a political football.

'Disguised salary' is where something you might buy for yourself is paid for by your employer. It doesn't just mean paying you in Pokemon cards or Rolex watches which you can sell. I'm not using it in HMRC's technical sense which seems to be specific to LLPs, so sorry if that is ambiguous. A benefit is a great way of putting it; if you don't want to take it, you don't pay tax on it. But if you do take it, it has a value - you're taxed. Simple.

[dinny_g]

I think Jobbo is right here GG...

But I do think if you buy certain types of insurance, privately, out of your "after tax" money, they there should be some relief for you.

But in my case, as it's through work, it's definitely taxable