|Text back to normal now. Revenue must have just cashed my cheque!|
|Well you gotta larf, aintcha? ;-)
|Everything? It looks OK on my browser.
Perhaps you haven't paid your tax! ;-)
Some of the wording in MIATA's original heading is in red.|
|Why is everything appearing in red here?|
|OK. Thanks, asmodeus. I hope it does help somebody.|
|Thank you pvb. You may not be a taxexpert, but you have taken a lot of trouble to learn just as much as one, and your Post is much appreciated by this basic-rate payer for one.|
|[N.B. No Edit]
OK so possibly nobody is interested. Either because:
1. Nobody is interested
2. Everyone on ADVFN is already fully familiar with all this
3. Everyone on ADVFN already files a SA tax form
4. Or... ;-)
But surely there have to be some Basic Rate Taxpayers on here who need to know and understand the new income tax system, due to come in at the start of the new Tax Year and how it could/might affect them. From 6th April this year Tax on income, such as interest payments and share dividends, is no longer handled 'automatically' for BR taxpayers and will in future be collected from you directly using the PAYE system, via adjustment to your annual Tax Code. So is your Tax Code correct? How do you know? Have you checked?
Yes I know it's boring but you need to pay attention.
WARNING What follows is based on my experience, is all only MY OPINION etc. and directed at BR taxpayers. I'm sure HR taxpayers can work it out for themselves and will anyway be filing a SA form (for now at least). I AM NOT ANY KIND OF TAX EXPERT.
Anyways, here is a summary to date of 'what we know'.
It's all about this, the governments plans for income Tax to go digital:
This is the proper reason for the new personal £1000 tax free allowance on interest payments. Forget all that "help for hard working people" stuff, IMO it's real point is to take the majority of BR taxpayers out of personal taxation for interest - this makes the upcoming HMRC online taxation IT systems workable and also takes the political heat off the government if otherwise practically all taxpayers woke up and realised they faced a future of fiddling around with taxation and the HMRC.
I assume everyone knows that, from 6th April this year, interest paid on cash accounts will be paid gross, no tax will be taken off at source. It will still be taxed (at 20% for BR taxpayers), but only above the new £1000 Personal Interest Allowance. Also, dividends will be taxed above the £5000 Dividend Allowance (at 7.5% for BR taxpayers). These taxes will in future all be paid directly by you, usually via the PAYE system.
How is your Tax Code derived?
Simple: Start with the Annual Personal Allowance (£11,000 - 2016/17) add on the personal Savings Allowance (£1000 - 2016/17). Total = £12,000
Then they start taking things off:
Dividend Tax e.g -£225 (see below for an explanation of this figure)
Interest paid gross e.g -£1500
State Pension (paid gross) e.g. -£7000
Result 12,000 - (225 + 1500 +7000) = 3275
If you are a BR taxpayer on the standard allowance then your Tax Code will be 327L. This is given to your main PAYE payer and they will take off ALL the tax due from your main PAYE income at the 20% rate (BRT taxpayers).
The point of the above seems to be that effectively (assuming BRT) ALL the above can be taxed at the 20% rate (BRT on PAYE income, Savings Rate Tax on interest and also at 20% on the 'dividend income') and collected from your PAYE source - pay or pension.
Hang on! Isn't dividend tax 7.5% NOT 20% (for BR taxpayers)? And what about that £5000 dividend allowance? Correct. That is why the 'dividend income' of £225 shown above is not the real taxable dividend you receive it is an adjusted amount derived from the actual figure you are expected to receive.
It seems to work like this: say you are expected to receive £5600 in dividends during the tax year 2016/17 so, the adjusted figure in the Tax Code calculation is equal to 7.5/20 * (Expected Dividends - Dividend Allowance). So in this case:
£5600 - £5000(div allowance) = £600 taxable dividends.
Following adjustment by the ratio of the 7.5% Dividend Taxation rate and the 'normal' 20% basic rate we get:
(7.5/20) * £600 = £225
And it is this 'reduced' figure that appears in the Tax Code calculation rather than the 'actual' £600 of taxable dividends above the £5000 dividend allowance, to be taxed at the 20% rate (for BR taxpayers). Neat huh?
The point is, the interest and dividends used are those assumed or known to HMRC for the tax year 2016/17. IS IT CORRECT? Only you know or can estimate this in advance. But the figures shown on your recent Tax Coding Notice will be used to collect the tax from your income via PAYE in advance, not after you have received it. You need to check that it is reasonably correct or you can end up paying too much or too little tax during the year - it is no longer neccesarily 'automatic' even for BR taxpayers.
At the end of the tax year any errors will need to be adjusted either by payments or adjusting the next years Tax Code. This will be done via the Online Personal Tax Account in future yeras, according to the government documentation.
If incorrcet now you may get your Tax Code adjusted by filling in this form online:
I did this as my Code was too low and I have had it raised. They aim to get back to you in 15 days. It seemed painless enough
You can wait for your new tax code to be posted to you or look at your Online Personal Tax Account (if you have one). You can do this after registering using your Government Gateway Account credentials (if have one) or using the newer GOV.UK Verify service, which uses approved companies (eg Post Office, Verizon) as sponsors to guarantee you are who you say you are.
Here is the Government Gateway route:
First time you will need to register for the Online Tax Account - You need, DOB, NI number and likely a P60 as they asked me for details as a check. You need a phone for a one time PIN number sent by SMS every time you log on.
This sytem is still in public BETA but will, presumably, 'go' from 5th April.|
|Firstly, apologies for quoting from the Daily Mail. And, as usual, you have to discount the "we'll all be murdered in our beds" flavour. ;-)
However, with only about 28 days to go, public noises are finally being made:
HMRC on "Making Tax Digital" :
|...the only institution I am currently aware of who has made an attempt at communicationg the significance of the changes to its customers is Coventry Building Society.|
|And have since received my 206/17 Tax Coding Notice.
Huh! I knew it would be like this! I said so. They weren't listening. They are now.
Well actually, no they aren't. Nobody seem to be addressing the new Income Tax system (effective 6th April 2016) and how it could/might/will effect people (in particular some BRT payers). Nothing on Moneybox etc. At least I haven't heard as of yet.
They will. ;-)
The new system effectively works in advance, even for BRT payers. Think about it.
Whatever happened to 'simple'? :-(|
|The digital Personal Tax Accounts (Beta version) are now accessible online via the Government Gateway (as well as directly via HMRC) - if you have a GG account.
Can register with a P60 (for NI number plus data) plus mobile for texted one time login code.|
|Interesting! I have just received my "Annual Tax Summary 2014-15" from HMRC.
This is only the second year these have been sent out, I shall study it closely.
The thing is, what about next tax year? It will be interesting to see how all this works out going forward wrt the 'Tax Free £1000 savings interest' (£1000 for BR taxpayers at least), the changes in the taxation system for share dividends and the new Online Personal Tax Accounts. Anyone heard any news on those?|
|Best wishes to Miata.Not many give great advice so freely and unselfishly over many years.|
|goatherd please pass my best wishes onto Miata for all the helpful and invaluable advice he has undintingly provided to everyone on his thread over many years. Without knowing his medical circumstances I wish him as an absolute minimum a speedy improvement to his health although preferably a return to full health and a dramatically improved quality of life. IE|
|Further to my 1316 - at last, here is an explanation of "gross" and "net" dividends from the AITC.
"What about overseas dividends?
This is more complicated and has to be looked at on a case-by-case basis,
as some overseas countries do deduct withholding tax from the dividends
which you may be able to reclaim.
However, most investment companies which are not based in the UK are
based in the Channel Islands. For these, the tax position for dividends is
exactly the same as for a UK based investment trust. No tax is deducted
from the dividend and you are entitled to the same 10% tax credit.
It is therefore not true to say that Channel Islands investment companies pay
dividends ‘gross’ and UK based investment trusts pay dividends ‘net’. If either
declares a £9 dividend, you will receive £9 in cash and will pay exactly the
same amount of income tax on it."
Of course this confirms pvb's 1317. But did I ever doubt it? Many thanks.|
|Sorry to hear that also, Miata was always very good at answering & helping folk out. Wish you all the best Miata. tks goatherd|
thanks for the heads-up,sorry to hear Miata is unwell.|
Sadly Miata is very unwell, and has not been able to answer questions here for quite some time, so you should not rely on it, and perhaps make your enquiries elsewhere.
I would help if I could, but I know nothing of National Insurance|
|National Insurance,are my workings correct.
Assuming allowance of £7200 p/a before NI kicks-in,at a rate of 12%.
1) earnings £1000 per month = £1000 less £600 = £400 @ 12% = £48 NI per month =
2) earnings £0 for 3 months = £0 NI
earnings £4000 for month 4 = £408 NI
earnings £0 for next 3 months = £0 NI
earnings £4000 for month 8 = £408 NI
earnings £0 for next 3 months = £0 NI
earnings £4000 for month 12 = £408 NI.
In both cases yearly earning are £12000,but for example 2)your NI payments are £648 more because your earning are not regular,is this correct?
You need first to contact the registrar such as Equiniti. They will need proof of probate. In some cases there will be a change in the number of shares ie a share split etc. In these cases they issue a new certificate and the old one becomes invalid. If you only have one certificate in the company it's probably valid. (You would only throw away the old one ! ) If you have any dividend letters they would have the number of shares held.
Once say Equiniti are happy you will get a new certificate in your name. The shares can be sold by the administrator.|