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Post by ladywhitenap on Apr 13, 2016 10:11:41 GMT
Possibly one for Andy here.
How much information about taxable interest does Ablrate give to the the revenue and when does it happen?
I am NOT trying to evade tax.
To date I am a non taxpayer having not worked since 1980s on health grounds and have just started getting my basic state pension (well under the personal allowance) I will also get the £1000 extra tax allowance this year.
My interest earnings on savings with Ablrate will not put me into a bracket where I'd have to pay tax. £10.21 to date!
But depending on how HMRC view whatever info they have about my membership here, would this mean I have to start completing tax returns just to prove I don't owe any tax or do I just keep quiet and wait and see what happens. A low (or no) profile with HMRC would be just fine by me. They have extracted many pounds of flesh from my husband over the years so I think they have had quite enough out of our household!
Maybe Ablrate only have to notify interest over a certain threshold perhaps? I just would like to know how it works please.
TIA
LW
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pom
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Post by pom on Apr 13, 2016 10:34:25 GMT
I'm not a tax adviser but it's highly unlikely they'll want you to do a tax return for that (it has to be a pretty expensive process after all). They might need you to fill in some shortened form (the one I'm thinking of that we needed to fill in for my aunt, who was in a similar position - basic pension but a small bit of savings interest such that she needed to reclaim some tax was very simple, think it was just 2 sides of paper, most of which most people would need to leave blank anyway as it was a kinda one-form-doesn't-fit-all).
Edit ps - or it will probably be the case that as the amounts are so small and there isn't any need of payments/refunds you don't in fact need to do anything at all. Simplest thing to do to set your mind at rest would probably be to make a quick call to HMRC
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pom
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Post by pom on Apr 13, 2016 10:44:02 GMT
PPS www.gov.uk/check-if-you-need-a-tax-returnI just flicked thru it guessing at what your answers may be, and looks like unless you have 2500 or more of untaxed income you don't need a tax return but will need to report it to them |
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SteveT
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Post by SteveT on Apr 13, 2016 10:51:03 GMT
"QUICK call to HMRC" .... Is there such a thing?
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pom
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Post by pom on Apr 13, 2016 10:57:33 GMT
"QUICK call to HMRC" .... Is there such a thing? Sometimes... I had to make a LOT of calls to them last year about all sorts of weird & wonderful things I'll hopefully never need to puzzle over again and a couple of times I was connected so quickly it took me by surprise, so if you choose your time of day well it can be quick (tho I never did manage to work out what was a good time of day!). So I must confess I did end up switching over to writing instead (once I'd moved to less urgent stuff that had plenty of time to resolve anyway) which usually takes them a month to respond to
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james
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Post by james on Apr 13, 2016 13:35:41 GMT
Unless you have foreign income from one of the non-UK platforms you probably don't need to file a tax return.
Hopefully you are making pension contributions of £2,880 net, £3,600 gross a year and will continue to do so until the tax year in which you reach age 75. If you have £3,600 of personal allowance available the potential tax gain from paying in and taking out is the full £720 difference between the amount paid in and taken out, otherwise it's less but always something.
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Post by ladywhitenap on Apr 13, 2016 14:27:36 GMT
Unless you have foreign income from one of the non-UK platforms you probably don't need to file a tax return. Hopefully you are making pension contributions of £2,880 net, £3,600 gross a year and will continue to do so until the tax year in which you reach age 75. If you have £3,600 of personal allowance available the potential tax gain from paying in and taking out is the full £720 difference between the amount paid in and taken out, otherwise it's less but always something. Interesting idea James, but can I legally claim tax relief on a pension payment when I'm not paying any tax in the first place?? I've not paid any tax since 1987. LW
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rogerbu
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Post by rogerbu on Apr 13, 2016 14:45:32 GMT
Unless you have foreign income from one of the non-UK platforms you probably don't need to file a tax return. Hopefully you are making pension contributions of £2,880 net, £3,600 gross a year and will continue to do so until the tax year in which you reach age 75. If you have £3,600 of personal allowance available the potential tax gain from paying in and taking out is the full £720 difference between the amount paid in and taken out, otherwise it's less but always something. Interesting idea James, but can I legally claim tax relief on a pension payment when I'm not paying any tax in the first place?? I've not paid any tax since 1987. LW Yes, as an unemployed/retired person you can contribute a maximum of £2880 to a SIPP, this is automatically upgraded by £720 by the SIPP provider to make a £3600 contribution to your SIPP. If you were to then draw this pension pot down you would receive £3600 X 0.25 tax Free = £900 + £3600x.75 taxable. Assuming all this is taxed at 20% = £2700 * 0.8 = £2160 (could be better is taxable inc less that £11,000) £900 + £2160 = £3060 ie Pay in £2880 take out £3160 a profit of £180 The same £2880 invested in AR etc at 12% would have become £3225.60 in one year
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blender
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Post by blender on Apr 13, 2016 15:01:27 GMT
If you are sure that you do not owe any tax for 2105-6 and do not wish to reclaim any tax and have not been asked by HMRC to complete a self assessment, then you need do absolutely nothing - not even worry.
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rogerbu
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Post by rogerbu on Apr 13, 2016 15:15:33 GMT
Possibly one for Andy here. How much information about taxable interest does Ablrate give to the the revenue and when does it happen? I am NOT trying to evade tax. To date I am a non taxpayer having not worked since 1980s on health grounds and have just started getting my basic state pension (well under the personal allowance) I will also get the £1000 extra tax allowance this year. My interest earnings on savings with Ablrate will not put me into a bracket where I'd have to pay tax. £10.21 to date! But depending on how HMRC view whatever info they have about my membership here, would this mean I have to start completing tax returns just to prove I don't owe any tax or do I just keep quiet and wait and see what happens. A low (or no) profile with HMRC would be just fine by me. They have extracted many pounds of flesh from my husband over the years so I think they have had quite enough out of our household! Maybe Ablrate only have to notify interest over a certain threshold perhaps? I just would like to know how it works please. TIA LW @ablerateandy I would still love to see an answer to ladywhitenap 's excellent question, What information about lenders does AR actually provide to HMRC and when? Like her, my main wish is to be sure that what I am reporting matches what a platform is reporting. Discrepancies raise flags in HMRC's curious computers
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james
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Post by james on Apr 13, 2016 15:17:30 GMT
can I legally claim tax relief on a pension payment when I'm not paying any tax in the first place?? I've not paid any tax since 1987. Yes, you can. You just pay in the 2880 net and 25% tax relief is added. This relief is available even for those who have no income tax to pay. The relief is typically added either immediately by large insurers or around the third week of the following month by other places. You can take out the initial deposit at any time and the tax relief when it arrives, though for convenience you might want to do them both at the same time. Virgin is quite a good one to use for this because there are no charges involved, just pay in and once the relief is added use the UFPLS option to withdraw all of the money. They will deduct more tax than actually due, if only because they will certainly assume that you have to pay 20% income tax on the 75% taxable portion. They will also send you a 45 because pension payments are handled through PAYE and this is the end of your "employment" with them. You can use your HMRC online Personal Tax Account to reclaim it, there's a link to this feature there. HMRC should pay the required refund in a few weeks. The Personal Tax Account service is pretty easy to use, at least I've found it so. Once you have the money out again you cam merrily reinvest it in P2P until the next tax year comes around. For others who are aged 55 or older it's worth knowing that once any money is taken out of a pension beyond the tax free lump sum the annual pension contribution allowance is reduced from £40k a year to £10k a year and carry forward from past years is no longer permitted. This is a great deal particularly for the many women who are quite likely to be able to take out the whole amount with no tax being due for a gain of £720 a year, just a quick reclaim from HMRC for the income tax amount that will be deducted by the pension firm.
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Post by ablrateandy on Apr 13, 2016 15:23:05 GMT
HMRC have requested a summary of interest payments made by borrowers to lenders. This would be in line with what your bank etc may provide, I guess. IMHO though it looked like a dry run rather than a full-on investigation into the sector.
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duck
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Post by duck on Apr 13, 2016 15:30:07 GMT
Interesting idea James, but can I legally claim tax relief on a pension payment when I'm not paying any tax in the first place?? I've not paid any tax since 1987. LW Yes you can. I don't have a pension of any type but my partner (wife in 2 days - inheritance tax planning  ) does and I've topped it up for the last 2 years ..... totally legal. She 'retired' a couple of years ago and doesn't have enough taxable earnings to pay tax .... so I assist her in using up her tax allowance as well.
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james
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Post by james on Apr 13, 2016 15:51:22 GMT
HMRC have requested a summary of interest payments made by borrowers to lenders. This would be in line with what your bank etc may provide, I guess. IMHO though it looked like a dry run rather than a full-on investigation into the sector. Itemised by lender or overall? Did they want to know the amount lent as well? Lender names, dates of birth and NI numbers? Wondering if they are looking to try to get a handle on the potential revenue or how they might tune evasion detectors based on interest rate assumptions for P2P vs deposit accounts. Big difference in assumed capital for possible evasion detection between 1% savings account, 6% P2P, 12% P2P and 26% P2P and platforms could definitely help with that by showing the higher levels of interest payment to HMRC. HMRC doesn't ask for or normally get individualised amounts per platform from P2P lenders so it'll be interesting to know what they are looking for.
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Post by ablrateandy on Apr 13, 2016 15:58:46 GMT
It was broken down by lender BUT (and the reason why I think that this was a dry run) whilst they asked for lender information, P2P platforms don't have a common identification method such as requiring an NI number or passport number.
As James eluded to, I suspect that part of this process was for HMRC to get a grip on how to deal with this industry on a long-term basis. That being said, people should always be aware that if your interest is taxable it should be declared.
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) does and I've topped it up for the last 2 years ..... totally legal. She 'retired' a couple of years ago and doesn't have enough taxable earnings to pay tax .... so I assist her in using up her tax allowance as well.