Tax on accumulation bonds

August 23, 2019, 10:08 am

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I purchased this accumulation bond at the end of last year, and the value has increased by 3.01% between then up to 5th April this year.

SHORT DURATION Global HIGH Yield Bond M GBP ACC ROYAL LONDON ASSET MANAGEMENT BD FD

https://secure.ii.co.uk/webbroker2/research/funds/BD0NHK8/overview.sp

This site suggests that income from this type of accumulation fund is treated thus

Quote:

Income rolled up into your accumulation units is known as a “notional distribution” and is taxable in exactly the same way as the distributions from income units

.
https://www.youinvest.co.uk/articles/sharesmagazine/89901/income-versus-accumulation-units

Am I correct in assuming all the gain between the two dates should be treated as income and treated as such for tax purposes?

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How do I give my son money?

August 24, 2019, 2:36 am

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This might be complicated so I'll try and explain it as simply as possible.

My late Mum wished that my children have £12k from the sale of her estate each to use as a house deposit. She thought her will reflected this but when she died it transpired they recorded her wishes wrongly and I inherited everything.

When she died I paid off the remaining mortgage on Property A. With the remainder I bought property B and moved out, leaving my son in property A with his fiancee.

Son now wants to buy property A from us, so we are selling it to him. His £12k from Mum is in the property and will gift over from us on completion, meaning his mortgage offer is £12k less than the purchase price.

As our parents gifted us money we want to gift him £3k from us as well but we realise now that this might be tricky. We can account for the £12k gift (£3k from each of us for 2 years) but how can I gift him the additional £3k?

Ideally I want the £3k to remain in the property so his mortgage is £15k less than the asking price.

As an aside, they are planning for a wedding and I notice I can give a £5k wedding gift. Can I do this so that this money remains within the property or do I need to give him £3k separately in cash?

I appreciate that was massively confusing! Trying to do what Mum wanted on the back of a fairly useless original will writer is difficult.

Bad advice from accountant? EIS Loss relief

August 24, 2019, 11:51 am

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Hi,

I made an EIS-qualifying investment in a start-up company a couple of years ago.

Initially, I claimed back the 30% income tax relief.

Then in December 2017 the company went bust and was officially dissolved.

An accountant told me that the extra "LOSS RELIEF" that I could claim, as a result of the company going bust, would only be claimable against CAPITAL GAINS tax. At the time, I had no capital gains to claim against... so I never claimed the loss relief.

I have recently been advised by some friends that in fact the loss relief is claimable against income tax... and that essentially I threw away that money.

What is right? Is the EIS loss relief claimable against income tax? Can I go back and claim that money now? What are my options?

I'd appreciate any help.

Company car tax

August 26, 2019, 1:18 pm

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so i've not long found out that I am on a K264 tax code, being taxed over £110 per week!!!
I guessed this is because I didnt pay enough tax last year because half way through the tax year I received a promotion and started getting use of a company car.

I didn't realise that I would be taxed on this, maybe it's something I should have known but no one actually told me, not ever my employer! now before I got the letter about my tax code changing I received another one I think a P11d?? for BIK?? stating that my company car is a Peugeot 308, now I work for a car rental company, and our company cars are not guaranteed makes or models, its what ever we are able to take on the day, up to a certain class, so sometimes it could be a 308 or similar, sometimes its a Toyota aygo, other times it could be a van!

My questions are, how can I be correctly taxed on a company car, if it changes from day to day? I think the longest I kept the same car was for about 4 weeks during a quiet period in car rental.
is the company up to something? is it being done correctly? and how come i'm being taxed such an astronomical amount each week for this?

Martin

Student council tax discount backdated

August 26, 2019, 3:12 pm

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Hi I am a full time student who meets the criteria to a council tax discount. My question is I wanna not aware of this discount last year when studying and wondered if I could claim for last years amount too? X

Saving on tax due to redundancy

August 27, 2019, 4:22 am

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Hi,
Next year I am being made redundant and have had a separation package figure of 133k.
I want to save paying 40% tax on as much of my redundancy as possible.
If I work to the final date of 25/09/20 I will be earning roughly 25k from April 6th 2020 and will then receive 133k of which 30k is tax free. I believe I can offset a further 30k to the following tax year. So 25k earnings and 73k payout will be 98k total taxable income for the year 2020/21 as I don't intend to work beyond the Sept 25th.
I have asked for an annual statement allowance for the past three years for my pension contributions to my final salary and avc provider Prudential. I have also got a small stakeholder pension that I have been paying a matched £10 per week so this will be valued around 3k if I keep this up to my finish date.
Should I be putting as much as I possibly can from the redundancy into my stakeholder pension and is this straight forward enough to do on my own?
I have arranged to see an IFA in the next few weeks but wanted to see if anyone could help with my plan,
Thanks in advance

Payslip Query / Childcare Vouchers

August 27, 2019, 7:07 am

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Hi All,

When i enter my figures into the tax home salary calculators it always seems i am paying too much tax and earning less Nett pay. Can someone please advise. I'm unsure if its because i am a higher tax payer and therefore my childcare vouchers are split (£124 non taxed) plus £119 taxed = £243/month vouchers. Also unsure if pension contributions are being collected correctly. My employers pays 4.5% and me 3.5% = 8% total.

Below is payslip for month 5, August.

Gross £4,340.00

Tax £657.40
NI £414.74
Pension Contributions 3.5% £105.00
Childcare Voucher £124.00
Adj from salary (childcare) £119.00
Healthcare £41.50

Total Nett this month £2,878.36

Tax Code is 1211L

Thanks!

HMRC tax calculation notice - error

August 27, 2019, 11:20 am

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Hi there,

I recently received a tax calculation notice from HMRC. It was for several thousands pounds and I was alarmed to receive this to say the least. The background is that I moved jobs during the 2018-2019 tax year. I gave new employer my P45 and they passed it on to HMRC.

When HMRC finally investigated this, they confirmed that they applied a cumulative tax code and issued this to my new employer. HMRC have said in their letter that this tax code ought to have included details of my pay and tax from my previous employer but "Unfortunately these details were omitted from the tax code and you therefore received the benefit of duplicate personal allowances against your income and this created the shortfall of tax of [approx 4K]. This was an error and I am very sorry for our failure to update your record correctly and you have not received the service you should expect from us."

However, they asserted that the tax is still due and said that ESCA19 does not apply because neither test was satisfied.

Is there anything at all I can do to challenge this tax calculation? I know that it is due tax, but I actually was at no point asserting that ESC19 applied - they brought this up in their follow up letter to me following a recent call.

When I called HMRC in late 2018 to query my tax when I joined my new employer, they assured me that the overpayments in the first two months were correct and were due to me. I therefore did not take this further. HMRC seem to admit in their letter to me that they made an error but seem to be able to get away with this on the basis that the ESC does not apply.

I at least want to challenge their letter and claim to the tax on the basis that they have overtly accepted they made an error. Will there be any leg to stand on here?

Thanks

CC

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Filing Income Tax

August 27, 2019, 1:23 pm

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What common mistakes we can avoid to have hassle-free filing of income tax returns?

Cleanest way to handle P800 refund when SA has not been submitted

August 27, 2019, 3:03 pm

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I have received a P800 refund letter from HMRC informing me I have paid too much tax which I can claim online within the next 42 days and if I do not claim they will send me a cheque in about 2 months.


This is the first time I have received this letter as in previous years I have completed my self assessment earlier in the summer. The amount is only a few hundred pounds which I do not need quickly so I am looking for the simplest way to proceed. What is the suggestion?



If I submit my assessment in the next few weeks will this stop HMRC from sending the cheque? If it doesn't and they send me a cheque after I have submitted do I return the cheque back to them? Is it safer to just claim it now and then show it in the assessment?

Tax Code - Death & Sickness Benefit

August 28, 2019, 2:26 pm

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I've just finished putting in a claim on my tax code for professional subscriptions. During the conversation with HMRC, they pointed out that my tax code already contains an allowance of £110 for "Death, Sickness and Funeral Benefits" and asked if this was still valid.

I have no idea what this is. Other than through the teachers' pension scheme, I have no such benefits. The only possibility is that many years ago, I may have claimed an allowable union subscription, but HMRC are adamant it is not that.

The union I was a member of closed down around 2 years ago.

Before I confirm that it needs taking off, what sort of things this may have been, just in case it jogs my memory!

How to safeguard a property

August 28, 2019, 5:43 pm

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This is probably not in the right area of the forum but I can’t find anywhere better so apologies if it’s in wildly the wrong place.

I’d appreciate any advice as to how to safeguard a property which we stupidly gifted money to a grandson to purchase. Stupid in hindsight anyway and now that we’re aware of facts and circumstances which our family had been protecting us from.

The situation is this. It’s a sorry tale. Our grandson owns a house which we gifted him £135k to buy. It was intended to be our legacy to him and provide him with a place to call his own. Issues with his mother meant that he was being thrown out of the parental home at frequent intervals and the resultant stress and turmoil was doing no one any good. We took him in for a while and decided that the best option was a place of his own. No rent to pay just utiities and ongoing maintenance which we were prepared to help with.

At the time he was in full time employment and although I had a lot of qualms about putting the house in his name, I was persuaded by my husband that it was the best way to settle him. But fast forward 18 months and we’ve learned that he has a drug and alcohol problem, is saturated in debt and has defaulted on all utility bills and council tax. He’s been off sick with mental issues for months and has been borrowing hard to fund the drink and drugs. He’s in a real mess and simply doesn’t seem able to live a normal life.

We’re worried that the house is at risk of either debtor legal action or being used as collateral for further loans and are looking for ways to protect the property. Any ideas please?

Yes, I know we’ve been been extremely stupid.

Claiming Vat back on millage

August 29, 2019, 2:40 am

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HI I am self employed and have recently had to Vat register voluntarily. I just wanted to check. I currently claim my 45p per mile on millage. Can I claim the vat on this as long as I keep Receipts ect.

Dispute re Council Tax - method of communications

August 29, 2019, 3:47 am

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Hello
Hope someone can assist. I am in dispute with local authority re council tax. I moved house last year in July, without selling my previous residence, and applied via email in October for an empty homes exemption for the old house.
I continued paying CT via direct debit and clocked up a reasonable credit on the account.
I gave the council my new (temporary) address, but then moved from there In December before I had heard anything back from the council about my exemption request.

Fast forward to May this year, and I finally receive a bill for this years CT sent by the Council to the temporary address. I call them and try and establish what has happened re the exemptions, but get cut off before I get a response.

I pay what has been asked for, but the account had already been transferred to their debt collection agent and a 10% levy added.

My question is:
I communicated with the Council via email re the exemption request, and expected that they would respond to me via email. They did not respond by email, and instead say they sent bills to a temporary address, that I did not receive. Do I have grounds for complaint that they have failed to communicate with me in a reasonable manner?

Thanks!

P11D query

August 30, 2019, 2:44 am

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Hi,


I think I know the answer to this but wanted to double check as my employer is not being particularly helpful. I use my own vehicle for work and claim mileage back through our online system. I received a letter and a P11D form from my employer a couple of months ago. They have completed section 'E' - expenses not taxed at source - with a figure of £17.40 relating to mileage (this is the only expense I claim so I know it does not relate to anything else). As a result HMRC have amended my tax code. However when I looked into it my understanding was you only need to submit a P11D if you go over a certain amount of miles, which I definitely have not done (I've done about 200 business miles since I began at at this employer in November 2018 up to April 2019). I get paid 65p per mile.


I've asked my employer to look into it but they just aren't getting back to me. Can I go straight to HMRC to rectify this or does it have to be done through my employer? I've sent my employer the link below as proof that I don't think I should have to submit a P11D and have asked them to rectify it asap. It's not a huge amount but I've claimed expenses in other jobs and never had this issue before and don't want my tax code to be affected if it doesn't need to be.


https://www.gov.uk/expenses-and-benefits-business-travel-mileage/rules-for-tax

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Change of salary = automatic tax refund via PAYE?

August 30, 2019, 2:48 am

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I've been working full-time earning approx £2k/month before tax, so paying approx £200/month in income tax. Tax total = approx £1,000 this tax year so far.

I'm leaving work very shortly and returning to study. If get a part-time job at around £500/month gross from Oct-March I will earn a total of £13,000 this tax year so should only be liable for £98 in tax.

Please can someone tell me how this is refunded? An automatic refund through PAYE would be great, as I'll be a student and don't want to wait until April next year!

If it is automatic, how is it calculated? It also seems a bit strange for my new employer to potentially be paying me way over what I'm earning. How can I trust them to do this?

Offsetting Sole Trader Loss Against PAYE

August 30, 2019, 9:07 am

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Hi - I'm about to submit my self assessment & want to check I've understood the process for offsetting losses. Lets say in a given tax year I earned £20k in a paye job & paid tax of £2k on earnings above £12k (i.e. £8k was subject to tax) - but also in that year started a sole trader business that made a loss of £10k in that tax year. Am I correct in thinking that if I offset £8k of sole trader losses against the paye earnings I'm entitled to a refund of all the paye tax (£2k), and can also offset the residual £2k sole trader losses against previous or subsequent tax years?

Hope that makes sense.

Tax code calculations based on charity payments

August 30, 2019, 10:11 am

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Hi there

Just wondering how HMRC calculated my tax code, which has just changed.

I submitted my tax return in July for 18/19. I declared £2590 in charitable donations that tax year. Therefore they raised my basic rate limit by £3238 in order to calculate what tax I was owed. All good, and I received my overpayment quickly.

They've now adjusted my tax code so that I don't overpay but I cannot work out how it's been calculated.

They've taken the standard 12500 allowance and added £1619 (so my code is 1412L). I've worked out that £1619 is pretty much half of the £3238, but I can't work out why that's the calculation. It's more logical to me that my tax code would be aligned to 12500 plus £3238, and therefore my tax code would be 1573L.

I'm tried calling but gave up after 30 minutes on hold! I'll try again next week. I'm going to ask them to revert back to my standard code anyway, as I prefer a lump sum rather than additional money each month, but my lack of understanding of their calculation is driving me nuts!

TIA
KiKi

IHT and renting principal place of residence to pay for care home

August 30, 2019, 2:39 pm

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Hi,
If my Dad rents out his principal place of residence (valued about £250k) to help pay care home fees would that mean that IHT would be payable on PPR, because he would no longer be living there?

He has other business assets which mean the total estate would be greater than the nil-band but these can't be sold because the revenue from them is also being necessary to fund his care.
Thanks

Outstanding Tax Balance before switch to Limited Company

August 30, 2019, 3:09 pm

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Hi all

At the minute I'm trading as a sole trader. I'm a little behind with my tax, but I've a direct debit in place with HMRC to get me back on track.

The money coming into the business is going to rise sharply. It means I will be looking to switch from a Sole Trader to a Limited company.

Obviously I will cease as a Sole Trader at this point, but can I do this with outstanding tax? So, could I get in touch with them, explain I am no longer a Sole Trader, but now part of a Limited Company and continue to make my monthly payments to them to clear the amount that is still owed. At the current rate, this will take about another 8 months given that I will need to file for 2019-20 as the company runs April to April.

I guess I'd be paying this as someone who's now employed albeit Director of the company moving forward. I just wasn't if that when I stopped as a Sole Trader that the account would need immediate settlement. Ideally, the increaase in money would be a lump sum to just wipe it all off in one, but it's more an increase in hourly, for example, from £10 up to £20 per hour. Payments will increase though as a result to more money coming in.

I hope that makes sense and thanks in advance for any help.