Tax Expert

[Mentalpen]

anyone on here one?

 

[iAndy]

Depends what ya want to know am an accountant, but depends what area of tax ya wanting to know about

 

[Iain 007]

I'm tax exempt, So if it's about tax returns I can probably help a little.

 

[Mentalpen]

Its about the new child tax credit rules.

My understanding is i have to declare the wife is getting child tax credit and then an amount comes off me and i have to start doing a tax return despite been PAYE OR we have to stop claiming child tax credit.

So my question is how is the it based? I'm lead to believe we will lose 1% per £100 i earn over 50k.

but is that 50k basic or including overtime and or bonus's? before or after my pension comes off?

I get £115 guaranteed bonus a month for being a clever git but my overtime is forced and unpredictable usually 4-6 hours or so a month.

The letter i've got is utter crap! and i'm buggered if i understand the website i just seems to suggest if i earn under 60k i'd be better paying and keeping it.

 

[iAndy]

You've lost me mate in how your trying to explain it. Its not the line to which I am acquainted to. Am more industry and corporation tax, do deal with PAYE & Self Assessment but when it comes to tax credits we haven't had any as yet where I work so its not my line of expertise unfortunately.

We used to have a department at our practice that dealt with this but we sold the majority of our practice when my father passed away as it was too large to run with other business interests. If you struggle I can always get ya the number of who we sold to but I think they would want you to take ya details in and look into it for you at a cost.

 

[Mentalpen]

Ok they have changed the child tax credit rules.

So if I earn over 50k (my basic is over that) then we will loose a percentage of our child tax credit (1% for every £100 I'm over 50k)

We can either choose not to claim child tax credit or I have to become self assessment. I then pay increased tax to pay for the child tax payment my wife gets for our kids.

But it doesn't make it clear if it is based on my salary or overtime and bonuses are taken into account and if my deductions tax, NI and pension are taken into account.

 

[iAndy]

Have you tried this?

http://taxcredits.hmrc.gov.uk/Qualify/DIQHousehold.aspx

 

[iAndy]

From what I can see it is your pre tax earnings excluding any pension deductions or SIP deductions (for Share Incentives)

So I would believe its your totally pretax earnings, I think when your employer sends a P60 in at end of year then they will calculate any over/under payment in the same way as any under or overpayment of tax.

 

[Mentalpen]

Cheers iAndy,

Does that mean I will get a bill or will it still be calculated over the year as it is now with PAYE?

 

[iAndy]

If ya go self assessment then your return needs to be submitted electronically by the 30th December if you wish for any under or overpayment of tax to be taken by altering your PAYE coding, this gives you get an interest free weekly collection of tax due.

Am not too sure on this working family tax credits. I've never dealt with them and with not having any children we don't go through this. I file self assessment for myself as having a PAYE, directorships and rented income it has to be. Then the tax man sends me a nice piece of paper saying.... bend over and prepare to be interfered with like a child being left alone with Jimmy Saville lol

 

[Mentalpen]

Thanks again.

So anything I owe will be taken over a period rather than in one lump sum?

Sorry for the thick question he, he.

I'm just a simpleton with 1 Olevel!

I don't mind paying more (if you have too pay more, grrr) not that I don't pay enough as it is!

What I don't want is them going we want a big fat check in 30 days or else......

You don't really notice it as PAYE in fact until I looked yesterday I didn't even know how much I got paid! I've got 12 months of unopened pay slips he, he.

 

[iAndy]

As long as its sub £3k ya owe and submit a self assessment return before the 30th December then ya can have it taken by PAYE if thats the case.

 

[Mentalpen]

Nice one. So I continue to PAYE, then after the self assessment I will get a new tax code and pay it off over the next year give or take extra.

I think we get circa £1200 child tax credit so I should be well under 3k

 

[iAndy]

As long as you submit a self assessment return prior to 30th December then any under payment of tax will be adjusted using your tax code for the next year. But this is for the tax, if they have said that you can fill a self assessment for the correction to be worked out then I would assume this is the same.

 

[iAndy]

Do you not have to apply for the tax credits first before you get them? I've just been trying to get as much info without calling the tax office as am in the office at moment and shouldn't really be looking into this, but once I start I like to know the answers.

Found this on HMRC about filling in your application form which might answer your question about overtime and bonus'

You might not have all the information you need to work out your income for the last tax year. If so, use what you do have to make an estimate.
For example, if the money you have coming in is roughly the same throughout the year, you can use that amount and multiply it by:
52 if you are paid weekly
12 if you are paid monthly
13 if you are paid every four weeks.
If your estimate is too low, the Tax Credit Office may pay you too much and you'll have to pay it back.
If you have estimated your income, put an 'x' in the estimated income box of your tax credits claim form or Annual Declaration form. You'll need to provide details of your actual income by 31 January or the deadline given to you when you're asked to renew your tax credits.

 

[Mentalpen]

No you don't apply for it, it is given to you when you have kids.

My pay is reasonably static as I don't work overtime except the enforced that come with the job covering work.

But it is usually very little 4-6 hours a month.

So if I times a 4 weekly pay ( before stoppages ) by 13 and add a little I should be ok and if I'm over I will get a refund and if under have to pay it off a little per week provided I'm not 3k under?

It's a stupid system. 2 people earning £50,099.99 get full child tax credit but 1 person earning £50,100.00 has a percentage taken away.

I suspect they are hoping people won't bother claiming.

 

[iAndy]

It's a joke, really, more tax ya pay.... Less ya can get! Is there a helpline ya can ring to check that if ya simply fill a self assessment form out it will balance it out? I've been looking and can't seem to find the answers and its all a bit contradictory.

 

[Mentalpen]

Glad its not just us that think its contradictory then......

I'll give them a ring next week and see what they say.

There is not point taxing the poor as they won't make enough and the rich can pay to avoid tax so just shoot at those in the middle!

I still don't understand why some pay different rates to others. Surly if you pay say 20% then you pay 20% of what you earn and the more you earn the more you pay.

Just because you earn more you suddenly have to pay even more or loose something that two people can earn almost twice as much and not lose anything.

doesn't take long to see why people leave the country to avoid tax (lewis hamilton).