Tax Question

[Unwell Cat]

I'm earn over 40K a year and have done for the last 15 months or so. I'm employed rather than self employed). My question is am I supposed to be doing a tax form of some sort each year? Someone told me I should be claiming something back on my pension payments etc?

I really don't know what I'm talking about so any help would be appreciated.

[CMcK]

You will be sent a Income Tax form by HMRC if they think you are worth the hassle. It's for peeps who have company cars and more complicated financial affairs with stuff like shares and other investments.

I'm in a similar situation to you and HMRC sent me a tax form two years on the trot a few years ago. First year I owed £3 odds and the next year I got £80 back! I don't have any investments, company car etc so why they bothered I have no idea.

Still it wouldn't go amiss if you spoke to an IFA about your personal circumstances as there may be some benefit for you.

[Unwell Cat]

No company cars or other benefits. I just thought you were able to claim some form of tax back on your pension..?

[112]

Im actually doing my Tax at the mo' and it hardly seems worth it as the overall amount is a few pounds......

Still, it add up for future Tax re/payments.

Deadline is this Sunday I believe.

112

[Unwell Cat]

How do I even start to do it?

Im actually doing my Tax at the mo' and it hardly seems worth it as the overall amount is a few pounds......

Still, it add up for future Tax re/payments.

Deadline is this Sunday I believe.

112

[Mayhem]

No company cars or other benefits. I just thought you were able to claim some form of tax back on your pension..?

Your company should be doing that automatically for you, taking your pension contributions from your salary at gross, and then tax is levelled on the rest at the appropriate rate. That's how it has been for me.

[CMcK]

Are you doing a regular pension contribution off your gross salary or a salary sacrifice scheme?

[Chunky]

I get a tax return every year, it drives me round the bend. I'm employed, have a pension and health insurance through work who deal with all the tax, i have no company car, no income through stocks and shares or anything like that. I think in the last 3 years there has been less than a pound owed either way, I think I owed like 8p last year yet still they send them.

/rant over

[Unwell Cat]

Are you doing a regular pension contribution off your gross salary or a salary sacrifice scheme?

Actually on that point I'm starting a new job soon where I have the option of the above. Which one should I choose?

[merf]

i thought your responsibility is to declare any income to them you may me liable for tax on, if they don't send you a form that's your problem and should get one if you are liable.

once a higher rate tax payer even things like a simple savings account where tax is deducted at basic rate leaves you liable for the additional bit up to higher rate.

legally the onus is always on you to declare rather than them to spot.

[Brats]

No company cars or other benefits. I just thought you were able to claim some form of tax back on your pension..?

You can. You get tax relief on pension contributions made by you, but most firms only give you the tax relief on the standard 20% income tax rate. If you're a higher rate tax payer, you are entitled to claim back the extra 20% tax relief. This is obviously one fifth of your annual pension contributions, so can be a fair amount depending on how you personally contribute towards your pension (employer contributions are not included).

To claim it back, you need to register for self assessment and then complete and return a self assessment form by the deadline date. The deadline is approaching and in my experience it takes two weeks to get registered, so you've probably missed the deadline for this year.

I got registered and did a self assessment for two years purely for tax relief on pension contributions. Then I contacted the local tax office and asked them if their was an easier way. They agreed and took me off self assessment and increased my tax code so compensate, so I get a much higher tax free amount each year and no hassle of filling in the tax form.

Might be worth speaking to the local tax office and asking them if they can do that without you ever having to bother with a self assessment form.

[Unwell Cat]

You can. You get tax relief on pension contributions made by you, but most firms only give you the tax relief on the standard 20% income tax rate. If you're a higher rate tax payer, you are entitled to claim back the extra 20% tax relief. This is obviously one fifth of your annual pension contributions, so can be a fair amount depending on how you personally contribute towards your pension (employer contributions are not included).

To claim it back, you need to register for self assessment and then complete and return a self assessment form by the deadline date. The deadline is approaching and in my experience it takes two weeks to get registered, so you've probably missed the deadline for this year.

I got registered and did a self assessment for two years purely for tax relief on pension contributions. Then I contacted the local tax office and asked them if their was an easier way. They agreed and took me off self assessment and increased my tax code so compensate, so I get a much higher tax free amount each year and no hassle of filling in the tax form.

Might be worth speaking to the local tax office and asking them if they can do that without you ever having to bother with a self assessment form.

I think this is what I was looking for (thanks). I'll ask the tax office.

[Mayhem]

Are you doing a regular pension contribution off your gross salary or a salary sacrifice scheme?

My pension contributions are taken off my gross salary (so effectively I never see the money), and then tax/NI is levelled against the remainder.

[CMcK]

That's a regular style contribution. Salary sacrifice sees your pension contribution taken off your notional salary. Then when you get your pay slip your gross salary looks lower but you (and the company) save money on NI contributions. It should boost your net salary a little each year but it depends on your level of income.
It's really just a bit of accounting to save companies money on NI contributions. There is a good FAQ on the HMRC site about such schemes.

[Unwell Cat]

That's a regular style contribution. Salary sacrifice sees your pension contribution taken off your notional salary. Then when you get your pay slip your gross salary looks lower but you (and the company) save money on NI contributions. It should boost your net salary a little each year but it depends on your level of income.
It's really just a bit of accounting to save companies money on NI contributions. There is a good FAQ on the HMRC site about such schemes.

You got that link, I couldn't find it? Thanks.