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Post by bernythedolt on Nov 28, 2019 3:47:32 GMT
For those above who are not using up all their personal allowance: be aware that you can pass up to 10% of it to your spouse to use, if applicable.
I don't think this is particularly well known.
My earnings exceed the PA, but my wife's do not, so I take the unused 10% off her each year, to increase my own PA by £1,250 this year for example.
I hope that helps somebody.
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chriscross
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Post by chriscross on Nov 28, 2019 9:31:55 GMT
If you are non-tax payer then increasing your allowance won't help you! I think that if you earned £18,499, then if it wasn't for the £1,000 PSA you would be a basic rate taxpayer. If you do self assessment, and if you haven't submitted it for 2018/19, and if the numbers you are interested in haven't changed between last year and this year, then you can use the online submission to test these sorts of things. Put in numbers to test and run the calculation - (obviously) DON'T SUBMIT IT! I happen to be talking to a member of the family yesterday and we ended up on this subject and low and behold he was a self assessor and hasn't produced his 2018/2019 SA yet. So as per you suggestion bigfoot12, he produced a sample SA and being based on last years single persons tax allowance of £11,850 he entered solely taxable interest earnings of £17,851 (i.e. £11,850 + £5,000 + £1,000 + £1) , the £1 by the way was to prove we hit the taxable bracket, and low and behold HMRC calculated that he owed £0.20 in tax on the £1 over £17,850. Proving once and for all you can include the Personal Savings Allowance as a non tax payer, which is some good news for a change.. Thanks for everyones help and suggestions on this subject..
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keitha
Member of DD Central
2024, hopefully the year I get out of P2P
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Post by keitha on Nov 28, 2019 11:32:15 GMT
Thinking about it it's slightly strange
I "saved" into a pension which produces an income which is taxable, but if I had the same amount coming in every year from "personal" savings I'd pay tax on £5k Less
eg if my pension is £16K I pay tax on £3500, but if it was savings I'd pay no tax
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james100
Member of DD Central
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Post by james100 on Nov 28, 2019 12:04:25 GMT
Oh dear, so it does look as if I may have to start the dreaded self assessments, which I have avoided for a few years now. I receive taxable interest from 25+ different organisations (Banks, P2P), do you have to itemise each one or is it a single figure entry on the current self assessment? Every year, HMRC wildly overestimate my untaxed interest, so I have to gather all the figures and spend 30 minutes on the phone to them agreeing revised figures. It's frankly easier to fill in a self-assessment, but guess what... they won't allow it. I asked this week and they refused me. Same last year. Since kicking most of us off SA, HMRC don't want us back. So the new system, arguing figures in real-time by phone, is way less efficient, but it's what they want. I get the impression we taxpayers can not demand the right to fill in a SA, odd as that seems. I've certainly encountered reluctance and been told no.
You can enter SA at any time; simply submit one...there's no need to speak to anyone in advance and you don't need to be registered as a SA filer in order to do this.
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Post by dan1 on Nov 28, 2019 12:29:53 GMT
Thinking about it it's slightly strange I "saved" into a pension which produces an income which is taxable, but if I had the same amount coming in every year from "personal" savings I'd pay tax on £5k Less eg if my pension is £16K I pay tax on £3500, but if it was savings I'd pay no tax I assume the introduction of £5k savings allowance was to offset the low interest rate environment that we find ourselves in, or more specifically a way of gaining votes from those who rely on savings income, most evocatively, the elderly. I suspect there's an element of the fact that pension income is deferred income on which tax hasn't been paid (in the vast majority of cases) whereas savings has generally been accumulated from post-tax income.
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Post by bracknellboy on Nov 28, 2019 12:45:35 GMT
Thinking about it it's slightly strange I "saved" into a pension which produces an income which is taxable, but if I had the same amount coming in every year from "personal" savings I'd pay tax on £5k Less eg if my pension is £16K I pay tax on £3500, but if it was savings I'd pay no tax Pensions: you get tax relief on the way in, but get taxed on the way out; except for a chunk of it which you can take out without being taxed, assuming you fall below certain thresholds.
"Savings": you are taxed on the way in, AND taxed on the way out, except perhaps for some of it, provided you fall below certain thresholds.
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keitha
Member of DD Central
2024, hopefully the year I get out of P2P
Posts: 3,875
Likes: 2,313
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Post by keitha on Nov 28, 2019 18:20:09 GMT
Thinking about it it's slightly strange I "saved" into a pension which produces an income which is taxable, but if I had the same amount coming in every year from "personal" savings I'd pay tax on £5k Less eg if my pension is £16K I pay tax on £3500, but if it was savings I'd pay no tax I assume the introduction of £5k savings allowance was to offset the low interest rate environment that we find ourselves in, or more specifically a way of gaining votes from those who rely on savings income, most evocatively, the elderly. I suspect there's an element of the fact that pension income is deferred income on which tax hasn't been paid (in the vast majority of cases) whereas savings has generally been accumulated from post-tax income. except for those for whom savings income is from the tax free bit of a pension ( not that I'm complaining cos I'm in this group)
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Post by bernythedolt on Nov 28, 2019 20:34:17 GMT
Every year, HMRC wildly overestimate my untaxed interest, so I have to gather all the figures and spend 30 minutes on the phone to them agreeing revised figures. It's frankly easier to fill in a self-assessment, but guess what... they won't allow it. I asked this week and they refused me. Same last year. Since kicking most of us off SA, HMRC don't want us back. So the new system, arguing figures in real-time by phone, is way less efficient, but it's what they want. I get the impression we taxpayers can not demand the right to fill in a SA, odd as that seems. I've certainly encountered reluctance and been told no.
You can enter SA at any time; simply submit one...there's no need to speak to anyone in advance and you don't need to be registered as a SA filer in order to do this. Interesting, I'll try that next year. Completing a SA would be quicker and infinitely preferable to having to labour through the same figures by telephone, trying to match my accurate records to the ridiculous estimates and incomplete bank-provided records HMRC have to hand. Thank you for this advice, james100 .
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