Tax Returns

No, I thought this was impossible, how have you been doing it? Or maybe you don't want to post that on a public forum actually!

Just clicked on why I'm not following. My self employment income was PAYE/Dividend at the time. Anyway, I misunderstood your question so ignore me.

I cant get my head around this.

If by that example, you owe £3000 of tax the 2 payments would surely be of £1500 each.

Where does £2700 come from?
And 'balancing payment' of £1200?

The next 2 payments I understand; £1500 each.

To simplify, can I just pay the whole thing at once in Jan 23 (for 21/22) ?

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Where does £2700 come from?
And 'balancing payment' of £1200?

The illustration assumes that your bill was 1800 for the previous year, and this sets your payments on account of 2×900 for the year in question. You've paid those, but everything went better than expected and your actual liability is 3000
3000-1800=1200 to pay to complete your total
1500 is your first payment on account for the next year because its half the 3000 you're expected to owe
1200+1500=2700

can I just pay the whole thing at once in Jan 23 (for 21/22) ?

If you haven't made any payments on account (e.g. you paid little or no tax for 20/21, so they didn't request payments on account), then you will pay the whole of 21/22 tax liability in Jan 23 and your first payment on account for 22/23, assuming your total liability is big enough to make them ask for payments on account. As far as I can tell, the threshold is £1000; if your total liability is less than that, they don't bother to ask for payments on account, they just take it all at once the following January. This does mean that if you go over their administrative threshold, you end up having to find 150% of that year's tax all at once, so bear that in mind, e.g. you've made no payments on account for 21/22 but your total liability turns out to be £3000, then they'll want £4500 in Jan 23

Got an email about my charity donations. Do people claim this stuff back? I thought the point was the tax savings were passed to the charity?

"Your Gift Aid Statement for tax year ending 5th of April 2022
Please find below the total value of donations made by you that included a Gift Aid declaration given by Swiftaid, your donor intermediary, for the tax year starting on 6th of April 2021 and ending on 5th of April 2022."

"Most people that are eligible to claim tax relief, don't claim!
Over £1,000,000,000 is missed every year. Take a few minutes to check if HMRC owes you money."

the point was the tax savings were passed to the charity?

Only if you do Gift Aid. If you don't, you can claim relief on your donations.

If you Gift Aid, the charity can claim back the tax paid at basic rate. If you're a higher rate tax payer, you can claim back the difference between the tax you've paid and the tax the charity can reclaim.

https://www.gov.uk/donating-to-charity/gift-aid

Yeah, I always do the Gift Aid thing. So, not sure why they're telling me about tax shit.

I guess I didn't think there would be people that would donate to a charity but then claim tax back for themselves.

I guess I didn't think there would be people that would donate to a charity but then claim tax back for themselves.

Your naivité is endearing. Never change, dearest Hippy, never change.

Because, as the link above shows, if you're a higher rate tax payer than you can claim back some tax too, and that doesn't stop the charity claiming the extra money it can get.

Example 1:

Basic rate tax payer donates £100 to charity and ticks the "Gift Aid" box.
Charity can claim an extra £25 (25p in the £).
Tax payer can't claim anything back personally in this case.

Example 2:

Higher rate tax payer donates £100 to charity and ticks the "Gift Aid" box.
Charity can claim an extra £25 (25p in the £).
Higher rate tax payer can also claim the difference in tax rates (currently 40%-20%=20%) of the total amount (£125 as it includes the original uplift). £125 * 20% = £25.

It's a perk of paying the 40% tax rate.

If you haven't been doing it then you could get a fair chunk of cash back from the Government just for submitting a few Self Assessments. (I have to do one each year anyway so it helps lessen the yearly tax bill.)

I've maybe got a grand or so in charity donations from this year. But I don't think the money I could get back would be worth the hassle of me doing "tax stuff". I got rid of all that paperwork when I went permie.

Same as that WFH allowance thing - it's not worth my time. But thanks for the explainer.

Your call but it takes me under 30 minutes to do my tax return each year. The hardest part is finding all of the bits of paper but I'm getting better at collating that in advance or hassling payroll depts for a copy.

It's simply inputting numbers from P60, P11D, the odd bank statement and charity donations (plus child benefit which is the reason I have to do it). This is the first year I've got an email from JustGiving so that makes that bit of guesswork even easier.

I think my last tax return involved me putting non-zero numbers in about 20 boxes spread over 10 pages. All online. (Although knowing what to and what not is required I agree is 90% of the work.) I live a relatively uncomplicated life with no other forms of taxable income or investments.

As a higher rate tax payer:-

• £1k in charity donations would get you ~£250 tax back.
  
• WFH would get you ~£125 tax back
  
  

30 minutes, or even an hour first time, for £375 back? I'd say that would be worth my time.

Tax returns are only complicated if you have anything more than a simple life: BtL/rental income, dividends from own company, more than one job, etc, etc.

It wouldn't be an hour. It'd be an hour to find all the charity donations (like "Gift Aid" doesn't show up in most donation emails), another hour to work out how to register on their stupid system and find all the details from work and then an hour to go through the forms and then weeks of worrying I'd got something wrong and then more hours when my tax bill came in and some new shit turns up that I've now got to pay for and...

Even with work doing my tax now and a simple letter turning up, because HMRC fucked it, I've had to spend an hour on the phone the last couple of years explaining to them that "no I don't still run a limited company" and they then refund £££ I didn't even know I was owed.
I don't trust them to get it right, I don't trust me to get it right. I'm worried if I speak to them again they'll find I owe them a big pile of cash for some other reason.

Ah, it's fear of the unknown...

It'd be an hour to find all the charity donations

You've just had that emailed to you. I guesstimate the rest (which aren't done through JustGiving). I've never been asked to justify the amount and I'd be reasonable confident I could if I ever was challenged on it.

I almost certainly underestimate but it certainly isn't worth the time and effort to get an exact answer. I'd probably spend a couple of hours to get me an extra £20 or so, so a guesstimate is good enough for me (and the HMRC).

another hour to work out how to register on their stupid system

It may take a week or so (elapsed time) to get registered as they have to send you a code in the post (maybe that's changed), but it really won't take long to register. You'll probably have to do it within the next few years anyway so may as well get it done now.

https://www.access.service.gov.uk/login/signin/creds?aoc=Y

find all the details from work

2 minutes to email your payroll dept and make it their problem. Ask for a copy of your 2021/22 P60 and P11D. It may take them time to respond but that doesn't make it take longer for yourself.

then an hour to go through the forms

Maybe first time, but you get faster each year.

then weeks of worrying I'd got something wrong and then more hours when my tax bill came in

There's no waiting. You get the calculation there and then and can modify it as many times as you like before final submission if it doesn't look right.

You've just had that emailed to you.

No, I had a summary of two donations emailed to me, the others are all to different places.

send you a code in the post

Definitely not doing this now. (Ok, ok, I'll have a look)

email your payroll dept and make it their problem

Ok, this kind of thing I'm good at. I was picturing me digging through our HR system.

Ok, you've convinced me to at least have a look at this stuff.

2 seconds later...

"You cannot access the service from this page

To access this service, you must return to the government page you came from and start again.

You can also start again from the GOV.UK home page.

You might need your Government Gateway user ID and password."

Let's try this URL https://www.gov.uk/personal-tax-account or is it this one https://www.gov.uk/log-in-file-self-assessment-tax-return

This one https://www.gov.uk/register-for-self-assessment/not-self-employed

From that page you'll need the link about Self Assessment: https://www.gov.uk/log-in-file-self-assessment-tax-return

If I register, am I going to have to file this shit every year?

No. It's only mandatory under certain conditions. I have to do it because of the High Incoming Child Benefit Tax Charge.

Registering doesn't change your obligations.

Can't find the link to register though, I end up getting an error with the HMRC Online Services page (the register to file your returns online link from https://www.gov.uk/log-in-register-hmrc-online-services/register )

If I register, am I going to have to file this shit every year?

Basically yes, until you convince them that you no longer need to file a tax return. But, if you're half way organised and have simple affairs, it takes half an hour once a year.

half way organised and have simple affairs

ROFL

Yes, as soon as I wrote that I knew it was a hostage to fortune, but you must have been slightly organised when you were a ltd co, and personal self assessment is much simpler than that.

I guess so, but it was still annoying. I'd run my funds down and paid myself once every 4-6 months because I couldn't be arsed filling out the spreadsheets the accountants required.
Like going to limited company, I put it off for ages and then when I started doing it I got more money but more paperwork too. I'll have to do it at some point because I want to move out of London and will likely end up renting my flat out. Then again I could let the missus manage that...

OH is a dual national UK/US, and was dobbed in (or if you prefer, notification due to UK Banks' legal requirement to report dual nationals) to the IRS. She's been dreading the IRS coming to find her: like many 'accidental' dual nationals (i.e. born there, hardly spent any time there - in her case complicated by a two year masters in the 90s), the IRS can theoretically charge you All The Income Tax on earnings here, despite already being liable for UK tax on it.

So starts the formal process to renounce her citizenship (costs loads and a massive waiting list because the emabassy has been closed for processing applications for ages because you know, Prangdemic), and the costly engagement of a UK-based tax accountant who knows how to sort the labyrinthine IRC forms etc.

Nervous wait.

OH is on a very low income. Turns out ... you'd never guess ... They Owe Her Money, not the other way 'round, because she didn't receive some Prangdemic furlough-type payments.

Hahahahaahahah

2021/22 tax return submitted.

(Wait, but, it is only September, not January 31st 2023!)

Small rebate coming my way (mostly due to me having 6 months off between jobs and therefore not hitting the CB repayment threshold). Which is nice.