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Post by khampson on May 18, 2017 13:10:18 GMT
I think I have read somewhere that you can get a £1000 tax free allowance on p2p savings, is this true? also how does it work, is it £1000 invested money of £1000 of returns? really confused so just looking for some clarification
thanks
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 18, 2017 13:17:47 GMT
I think I have read somewhere that you can get a £1000 tax free allowance on p2p savings, is this true? also how does it work, is it £1000 invested money of £1000 of returns? really confused so just looking for some clarification thanks All standard tax payers get £1000 Personal Savings allowance (PSA)which covers interest on P2P or normal banks accounts (not dividends), higher rate £500, top rate 0. This is in addition to personal allowances for income. So if you earn up to £1000 interest it wont be taxed. There is also £5000 0% starter band for savings interest which is available to anyone whose non-savings income is less than £17k. PSA is on top of this See hmrc website for full details
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Post by brummiefred on May 18, 2017 20:24:33 GMT
Is it that clear? From HMRC Guidance PSA 28Sept '16; If you're a basic rate taxpayer you'll be able to earn up to £1000 on savings income tax free. Higher rate taxpayers will be able to earn up to £500. But what counts as savings income? Bank and building society accounts, credit unions or NS&I. No mention of P2P!
However, elsewhere on Gov.uk Tax on savings interest, P2P is included under the sub-heading Savings covered by your allowance.
The 'starting rate for savings' is another matter, that few will qualify. How many earning less than £11,500 would earn £5000 interest to maximise the benefit? Mrs C or Mrs O perhaps!
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hazellend
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Post by hazellend on May 18, 2017 20:42:51 GMT
The 'starting rate for savings' is another matter, that few will qualify. How many earning less than £11,500 would earn £5000 interest to maximise the benefit? Mrs C or Mrs O perhaps! Mostly higher earners with a lower earning partner and savings in their name. Or people living off ISA income, dividends, and a smaller pension. It's a fantastic tax allowance so I expect it to disappear quite soon!
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will
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Post by will on May 19, 2017 17:59:54 GMT
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Post by robbobrum on May 20, 2017 13:58:39 GMT
Looks like i may of been done over then, i'm new to p2p so first year dealing with tax etc.
I phoned HMRC to declare my P2P interest earned which was £248 not much i know. I'm in the lower tax bracket and they have charged me £51.60.
So am i suppose to tell them about the allowance? or am i not suppose to declare the £248 as its under £1000?
thanks
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will
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Post by will on May 20, 2017 14:13:52 GMT
I don't think you need to declare interest of less than 1000. Call them again and they should sort it for you, but they are fairly incompetent.
I spent 3 months being told I wasn't paying taxes correctly for my business before they eventually agreed that I was right after all. That said, this is a fairly simple situation and should be fairly easy to sort out.
Good luck.
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archie
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Post by archie on May 20, 2017 14:20:46 GMT
Savings accounts don't deduct tax now. Your liability for tax on your interest will depend on your total savings interest from both P2P and other savings accounts (excluding anything in a tax free wrapper such as an ISA).
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 20, 2017 14:38:52 GMT
Looks like i may of been done over then, i'm new to p2p so first year dealing with tax etc. I phoned HMRC to declare my P2P interest earned which was £248 not much i know. I'm in the lower tax bracket and they have charged me £51.60. So am i suppose to tell them about the allowance? or am i not suppose to declare the £248 as its under £1000? thanks You need to declare it, and most P2P sites will tell you this and direct you here
If you earn under £2500 this can be done by phone, letter. Above that sum you will need to do SA. If you are PAYE they usually adjust tax code to collect the following year so its a bit surprising they have charged you up front. They possibly havent had the returns from the banks yet detailing standard interest earnings so have just assumed you are over the threshold... yourll probably get it back later in the year. P2P is supposed to be tax at source but currently has a waiver to bring it in line with standard interest whilst a consultation is undertaken. NOT ADVICE
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Post by robbobrum on May 20, 2017 14:42:36 GMT
Thanks guys, i just phoned them and they said its been put on the system incorrectly under "other earned income" instead of "personal savings allowance", All sorted now. What do people say to the automated lady to get sent to the right department etc?. I Said Personal tax allowance on savings and investments and she was on about Scottish marriage allowance for 5 minutes so had to hang up and do it again, must be my brummie accent  |
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Post by petebutt43 on Jun 30, 2017 14:23:56 GMT
Is it that clear? From HMRC Guidance PSA 28Sept '16; If you're a basic rate taxpayer you'll be able to earn up to £1000 on savings income tax free. Higher rate taxpayers will be able to earn up to £500. But what counts as savings income? Bank and building society accounts, credit unions or NS&I. No mention of P2P! However, elsewhere on Gov.uk Tax on savings interest, P2P is included under the sub-heading Savings covered by your allowance. The 'starting rate for savings' is another matter, that few will qualify. How many earning less than £11,500 would earn £5000 interest to maximise the benefit? Mrs C or Mrs O perhaps! I qualify as my earned income is NT (thank you Maggie). With my pension I can earn 8000 interest before I pay any tax. Every year I have to ring up to get my tax code put back to normal and declare my interest over the phone. So far, no response from HMRC!! Soon I will be getting about 65% of my income from p2p!!
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stevio
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Post by stevio on Jun 30, 2017 15:43:40 GMT
Is it that clear? From HMRC Guidance PSA 28Sept '16; If you're a basic rate taxpayer you'll be able to earn up to £1000 on savings income tax free. Higher rate taxpayers will be able to earn up to £500. But what counts as savings income? Bank and building society accounts, credit unions or NS&I. No mention of P2P! However, elsewhere on Gov.uk Tax on savings interest, P2P is included under the sub-heading Savings covered by your allowance. The 'starting rate for savings' is another matter, that few will qualify. How many earning less than £11,500 would earn £5000 interest to maximise the benefit? Mrs C or Mrs O perhaps! I qualify as my earned income is NT (thank you Maggie). With my pension I can earn 8000 interest before I pay any tax. Every year I have to ring up to get my tax code put back to normal and declare my interest over the phone. So far, no response from HMRC!! Soon I will be getting about 65% of my income from p2p!! NT?
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Post by petebutt43 on Jun 30, 2017 16:57:41 GMT
I qualify as my earned income is NT (thank you Maggie). With my pension I can earn 8000 interest before I pay any tax. Every year I have to ring up to get my tax code put back to normal and declare my interest over the phone. So far, no response from HMRC!! Soon I will be getting about 65% of my income from p2p!! NT? Not Taxed
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adrianc
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Post by adrianc on Jun 30, 2017 17:28:25 GMT
I guessed as much - but can I ask why and how?
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Post by petebutt43 on Jun 30, 2017 17:39:16 GMT
I guessed as much - but can I ask why and how? Government to government contractor in the ME, courtesy of Maggie Thatcher and John Major
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