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Salary Sacrifice Car and Income Tax Confusion?

August 29, 2018, 5:05 am
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Hi all!

I’m new to the forum and absolutely desperate for help from someone who knows what they are talking about. I feel like I’m completely getting fobbed off by my employers and HMRC as neither are giving me a straight answer.

I got my salary sacrifice car almost 3 years ago (so it is due to be returned in November). I was told it would cost me £435 a month but after ‘income tax and NI saving’ it would actually work out at £350 a month.

Tax codes and NI confuse me no end. Shortly after I got the car my tax code changed tO 540L, reducing my basics allowance. I feel like ever since I have paid more tax than before, it has really hit me hard. I’ve just had a letter through to say that it’s changing again to 77L X and that I actually owe them money.

When I logged onto the HMRC website it had it all documented as though I had a company car, and as though my employers were contributing (which they are not), therefore I was being taxed for it. It is listed that my contributions are £0 and that for this tax year my taxable benefit value is £5449.

Please someone tell me if this is right? And if not, what do I do next?

Thanks in advance
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Tax code and lost use of company car

August 29, 2018, 5:07 am
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I started a new job at the start of this month and receive the same gross pay but do not have use of a company car now. I'm not a higher rate taxpayer. I've received my first paycheck and it still shows the same tax code I was on at my previous company where I'd had use of a company car since January 2017 (and one before that with a low BIK since June 2015).

Should I be notifying HMRC myself that I don't have use of the company car anymore as I feel like I'm still paying a significant amount each month for something I don't have, or is that something my previous employer should have done when I left? My latest payslips shows that every single penny of my gross income each month is taxable, I thought there was a personal allowance (minus any BIK deductions)?

Would HMRC make me pay until the end of the tax year or would I get a cheque at the end for the remaining months of this tax year, or would they change my tax code now to reflect it?

Thanks
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Removed from title deeds

August 29, 2018, 2:23 pm
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Good Evening,
For personal reasons I want to remove my name from the title deeds of a property that I jointly own with my wife.
Just wondered what the Inheritance/ capital gains tax etc situation would be .
I am continuing to pay the joint mortgage as usual.
Any advice out there?
Ray
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Pension Tax Free Cash after age 75

August 30, 2018, 12:55 am
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A married couple without the possible liability to inheritance tax and both over age 75 wish to improve their tax position. The husband has uncrystalised Sipp and a Drawdown account, having taken part of his Sipp into Drawdown.

At his age, on his death the beneficiaries of the pension will be taxed at their nominal income tax rate by drawing income or encashing the Sipp pots.

Do you agree that they would be better off taking all his tax free cash now and investing into ISA's for ongoing tax free growth, rather than letting his Sipp pots build up that will eventually be taxed when he dies?

Sam
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Capital Gains Tax, Main Residence Query

August 30, 2018, 6:21 am
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Hi

I'm really confused about CGT and was wondering if anyone may be able to help me please?

My mom & dad jointly owned a property purchased in 1980 which they lived in permanently until 2004. In 2002 my mom brought a second property solely in her name.


They lived between the two properties - In 2012 they sold the house which was jointly owned and purchased another. They assumed that the house which they sold was their main home and did not pay CGT when it was sold.


Due to health problems the new house was never lived in & my dad died in 2016. My mom now wants to sell that property (purchased in 2012) and purchase another one. If she does would the property she is wanting to sell be considered to be a second home meaning she should pay CGT on the sale ?


If so would her CGT liability be at 50% for the 4 years that the property was jointly owned until my dad died if that makes sense??

Thank you x
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£1,000 trading allowance

August 30, 2018, 11:13 am
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As well as my full time job, I've also recently authored a text book for an educational company who will pay commission to me based on sales. This is expected to be in the region of £700 total (it's quite a niche text book!). They will pay this commission directly into my bank account with no tax etc deducted.

Am I right in thinking that because this is less than £1,000, it would fall under the £1,000 trading allowance and I do not need to pay tax on it?

Secondly, I've been invited to do another set of resources for them on the same basis - if this also ends up paying approx £700, so £1,400 total, does this mean that I am allowed to have the first £1,000 tax free and pay tax on the £400? I assume this all needs to be done through self assessment?

Thanks in advance :-)
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Reduced rent - taxable benefit?

August 30, 2018, 1:04 pm
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If my employer rents me a home (they own the property) and reduces the rent by £100 pm in return for me doing some minor caretaker stuff (approx. 30mins a day/7 days a week). Is it taxable in some way? It will be a separate contract that is in addition to my regular day job.
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Probate and inheritence tax forms - help!

August 30, 2018, 2:41 pm
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My mum died on 7 August and has left a will. The will leaves a fixed sum of money to each of her grandchildren and the remainder to be split equally between me and my sister.

We have had the house valued for probate purposes today and have her bank statements but I am really, really confused about which forms to complete.

My dad died back in 2006 leaving everything to my mum, hence not using any of his nil rate for IHT purposes. I am trying to apply to get this allowance transferred to my mum's nil rate. I understand that I need to complete IHT402 to do this. In addition to this, because my mum has bequeathed the house to myself and my sister, we need to claim the additional 125k allowance and need to complete form IHT435.

I called the probate office today to ask what forms I needed to complete and was told:

PA1
IHT217
IHT400
IHT435

However, upon downloading these forms, I am more confused than ever! The IHT400 lists a whole other range of forms I need to complete:
IHT205
IHT435
IHT436
IHT402
IHT405
IHT406
IHT407
IHT409
IHT435
IHT217
and some of the questions are not clear (to me anyway). I am not sure whether the AVIVA comes under the listed stocks and shares or as something else? It is a bond that she took out in 2006. She cashed in some but has some left in it - approx 16k.

The house is worth around 325k
There is approx 55k in a range of bank accounts
There is approx 16k in an AVIVA fund
Jewellery valuing approx 8k
Personal effects and furniture worth approx 8k

This makes a total of approx 404k.

This to me makes no IHT payable and below the IHT threshold of 775k.

I have tried researching and some places suggest that as the value of the estate is below the IHT threshold applicable, then I only need complete the IHT205 along with the probate form.

My head is all over the place - can anybody shed some light?

Thankyou.
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Dual nationality daughter and inheritance tax

August 31, 2018, 3:24 am
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I am temporary resident in Thailand and own a property in the U.K valued around 230k. I also have savings and investments of 176k,thereby my U.K estate is worth approximately 406k. I would like to know if my daughter whom has dual nationality (English-Thai) and currently resident and working in Thailand can inherit my entire U.K estate in full without incurring any U.K inheritance tax. This is assuming she is eligible to receive my family home allowance of 100k(tax year 2017-2018 in addition to the tax free threshold (nil rate band) of 325k. I have fulfilled the rules and conditions by which I am entitled to receive the family home allowance upon my death.However,I am unsure whether my daughter's dual nationality and present overseas domicile would have any bearing on entitlement to this additional allowance. Any money inherited would remain in the U.K. Thanks to anyone who may be kind enough to give me any information on this matter.
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An Awful Warning

August 31, 2018, 3:52 am
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This is rather long but it's an enjoyable account of the courts vigorously insulting a celebrated barrister for messing up his own tax affairs.

The lesson is: when HMRC demand info from you, it's best to comply.

http://www.bailii.org/ew/cases/EWCA/Civ/2018/1727.html

If you google the guilty man you find "In response to a legal request submitted to Google, we have removed 14 result(s) from this page." What can it mean?
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'Main residence' definition & CTG

August 31, 2018, 4:10 am
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Hi All,

I have a question regarding the 'main residence' definition in the context of the exemption from capital gains tax.

I own a flat, however, I don't live there (as a result of splitting up with my ex-partner). I don't own any other property, I rent the place where I live at the moment.

Is my own flat still my main residence or not?

Thanks for you help.
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Gift from parent to buy house

August 31, 2018, 6:33 am
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My mother wants to live with us & we also want her to join us, but at present our house is too small. My mother is currently selling her home (£800k) and we are currently selling our home (£340k). She wants to gift us £200-£300k once her house is sold so we can buy a bigger house so she can also live with us.
I know the tax implications regarding inheritance tax, but I don't regarding any other like Capital Gains Tax. Need some tax advice on the best way to do this please.
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car allowance, BIK, P11D, Tax. Confused. please help

August 31, 2018, 6:56 am
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Hi All

I am due to start a new role in 3 months which has a basic which puts me on the 40% tax bracket as well as £5700 car allowance. This is all new to me, I have done plenty of reading online as well as looking at similar threads on the MSE forum and just wanted to understand and clarify some further questions I have:

1. I believe I still would need to pay BIK rate per year whether I lease or buy a used car outright. is this correct?
2. If I buy a used car which had optional extras fitted at first purchase and I do need to pay this BIK rate. I calculate on the car when it was first released. Do I also need to include the options and is there a site I can do this on or another calculator that would do this for me?
3. Is it correct that Diesel cars incur a 4% extra surcharge? is this applicable for both new and used car?
4. My role is a non sales role and its expected that my travel will be no more than 4000k a year. I am opting for petrol over diesel because of this. I expect to do about 6000K privately. Is there anything else I should factor in based on this.
5. What is the reason why every tax year the bik rate goes up?


I do have some more questions, for the life of me I forgotten what they were now so will put them in when they come back to me but any advice on the questions I have raised would be most appreciated.

Many Thanks
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Combined inheritence tax threshold question..

August 31, 2018, 8:35 am
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Hi everyone, I come cap in hand for a little advice about the combined threshold of inheritance tax.


I'll start from the beginning. My father passed away in March 2000 at quite a young age (early 50's). He was apparently fit and healthy, but had a cerebral haemorrhage. He left no will, although all of his estate (or his share of it) went to my mother.


My mother is now in her 70's and is starting to worry about inheritance tax, or as she puts it, "Your father and I worked bloody hard for all we have, and we have already paid through the nose in taxes, so it annoys me that they will want to steal from me after I die!" :rotfl: gotta love her!


With the current tax free threshold being set at £325,000 (or £450,000 for property if left to offspring(s)) I began to wonder if she was entitled to a higher threshold due to the combined threshold of my father. I am not sure whether it goes back as far as March 2000, or if it's a more recent thing. She intends to leave all of her estate to me and my brother (assuming she goes first, although she is still in very good health).



I think her house is worth about £380,000 (mortgage clear) and she has around £175,000 in savings, wasting away in bank accounts.. I know that's a daft amount to have in the bank but I can't tell her otherwise.


What I'd like to find out is if she will be entitled to a higher threshold due to my fathers passing? It would then put her mind at ease a little! I've read through the GOV site stuff, but can't make head nor tail of some of it, so any help understanding it would be gratefully received.
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P11D BIK Help

September 1, 2018, 4:08 am
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Hi,

I have been in my current role for 8 months. I am looking for some help understanding a recent tax code change and a P11D form I have received through the post.

Based on the below. When i started 1150L M1 I was on emergency tax (M1). I presume this is just as its a new role and tax codes can take sometime to update. Then by April I had dropped off to a normal looking tax code 1185L. I paid higher tax that month as i received a small bonus. Then I go back onto M1 I assume because of the higher pay the previous month? June then looks like an ok tax breakdown. Then July/Aug this 1036L M1 tax code has appeared. Could someone please try and explain why? I presume its because of a P11D i recently received through the post? I had two company cars from starting my role. The P11D section F information is below.

Does the forgone in fuel section basically say that I should be paying fuel benefit tax? If so, what are the 866 and 498 figures? i thought fuel benefit was just a flat fee.

It looks like up to now I have paid no BIK tax on the cars or fuel benefit. How will all of this work out? Will HMRC look back at the last 7 months I've had the cars and start to tax me more each month to make up for it? Is it possible to calculate how much? Or will this be a bill at the end of the tax year?

I also have another car at the moment (only ever have one car at a time it just keeps swaping due to it reaching its mileage). I also have one on order to swap into. These are not on the P11D. Will they be added to next years - i suppose the same question then will arise when will i pay tax on those? The new car Im due to order says its 558 per month BIK and fuel benefit (com car -link below). If my P11D is up to date is that saying I should essentially pay 558+385(normal tax) in tax per month? I still cannot work out if the P11D is saying I owe fuel benefit or not.

Any help would be appreciated

Salary- 35K
Tax code breakdown for last few months
AUG 1036L M1 (tax 410 NI- 265)
JULY 1036L M1 (tax 410 NI 265)
JUNE 1185L (tax 385 NI 265)
MAY 1150L M1 (tax 391 NI 268)
APR 1185L (tax 596.20 NI 380)
FEB 1150L M1 (tax 391 NI 268)

P11D
car one
list price 26k
Cash equivalent or relevant amount for each car : 595
Cash equivalent or relevant amount foregone in respect of fuel for each car 498

car two
list price 37k
Cash equivalent or relevant amount for each car : 1443
Cash equivalent or relevant amount foregone in respect of fuel for each car 866
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Overseas Savings Interest Income & UK Personal Allowance

September 1, 2018, 7:42 am
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Hi all.
A family member has a problem; she lived and worked in Australia for a number of years, during that time she built up some savings, not a large pot but enough to receive some interest off of. She is now living back in the UK for now; she has dual UK and Australian citizenship. She no longer works here in the UK and what income she does receive in total on her worldwide income (UK & Australia) is less than her total UK personal tax allowance.
She pays a 10% non Australian resident tax in Australia on any savings interest received from her capital.


Does she have to declare to HMRC her savings interest income received in Australia, even though in total combined with her total UK income, her worldwide income is less than her UK personal tax allowance?


Does she need to file a tax return to the UK HMRC even though there is nothing owing?

Cheers.
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Self Assessment tax return & Savings Interest

September 2, 2018, 7:10 am
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As per my other thread.


Hi all.


I have an Aunt, my mums youngest sister, she went off to live in Australia, but has since returned. Before she went she opened around five different savings accounts with various institutions (cannot open them while abroad), and since returning she has opened a further five saving accounts again with various institutions (in case she returns to Australia). So in total she must have over ten different accounts. To make matters worse, each time there has been a new issue, .i.e. an increase in interest rate, she has closed the old issue and transferred the balance to the new issue. Not kept record of interest received post closing the old issue.

In the tax year 2017 to 2018, she held these accounts with different issues, so quite a number of various bank account numbers all paying interest amounts in the tax year 2017 to 2018.
When she closed the old issues she never kept an account of the interest payed to her by the institution for that specific closed account issue during the tax year 2017 to 2018.
Now it has come to light she must submit a self assessment tax return for the tax year 2017 to 2018. But has no record of all the interest she has received for that year.


Can I ask, does the online self assessment portal have a auto fill policy where the specific institution has forwarded on the information to the HMRC, so this auto drops the interest recieved into your specific assessment form?



OR



Does it ask for specific amounts of interest received from specific bank account numbers if the auto fill policy is not the case?


Or does she have to provide every account number, and every sum of interest received for that account number received in the tax year 2017 to 2018?


She has such small amounts in each account I do wonder why hold them all? But this is the case.


Thanks for any help.
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A certain website query

September 2, 2018, 10:32 pm
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Dear All,


Please can anyone advise as to how accurate the website is for listentotaxman is?


The reason for my query is that I can match all details with my pay and wage slip except for my student loan repayment and wondered if it is the website that is wrong.


Thanks
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Marriage allowance help

September 2, 2018, 11:03 pm
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Hi there all

I'm hoping that someone can help me with some info or advice.

I'm a non tax payer earning around £8000 per annum.
Back in 2015 I applied for marriage allowance. My husband earns around £48000 gross, but makes pension contributions to a personal pension of £12000 per annum. He pays tax at the basic rate after a rebate taking into consideration his pension contributions at the end of the year.
Initially we received the marriage allowance for 2016-2017.

However after a call to HMRC regarding a minor separate tax issue 2016-2017 was reassessed and the marriage allowance for that year and subsequent years has been removed creating a tax bill.

After a telephone call to HMRC they are stating that as my husband is a higher rate tax payer we don't qualify for marriage allowance.
However my husband pays tax at basic rate after the rebate at the end of the tax year taking into account hos pension contributions.

Any advice or info would be gratefully received.
Thank you
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Limited Company Business VAT Help

September 3, 2018, 1:51 am
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Started trading in June, VAT cut off date is July so deadline for VAT payment is this Friday.

Trying to understand the VAT payment is really confusing me. I am on the flat rate scheme (16.5%).

The GOV website has the information, and how what you owe is worked out. It says that you earn an income e.g. £1000, and charge VAT on top of that at 20%. £1200. You then pay 16.5% of that = £198.

That seemed dubious to me, for example if i charge 20% VAT and had to then pay back 20% VAT would I not charge £200 but pay back £240???

Surely it should be you pay back the 20% VAT that you claimed were you paying 20% VAT and nothing more in to your wages on top...?

So in my case:

Income - £10,599.54
VAT 20% - £2,119.90
Total - £12,719.44

I would have assumed I would claim 20% VAT from the income, but pay back 16.5% of that as VAT, whilst the other 3.5% is mine. Equaling £1,748.92

According to the GOV website I need to pay 16.5% of the whole total though. Equaling £2,098.71.

Again, taking it back to if I had to pay back a 20% threshold as opposed to 16.5%, using the GOV method:
I earn £10,599.54, I charge £2119.90 VAT, I then pay back £2543.89 (over £400 more paying back than I claimed!!!)


Am I understanding it wrong or is the government taking more VAT than should be?
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