So just got my last pay of the tax year and I’ll need to fill on a self assessment for the first time ever as I’ll have to lay back some of the lads child benefit. No biggie, it is what it is, but diesn anyone have any experience of doing such? I’ve stated staunchly PAYE forever to avoid things like this because honestly I can’t be chewed with them and uts less hassle to just have tax and stuff done for me. Question is really how likely am I to balls it up?
Very likely I’d say 
I’m certainly no expert and I’m not au fait on tax affairs but would it be feasible to get an accountant to do it for you and then offset the accountant fees against tax? Dunno if that’s possible and I’m interested in any answers
Really easy doing it online. Guides you through, you just answer questions and enter figures. Lots of pop up help windows next to the questions as well.
If you need to register on the Government Gateway give it a few days as they send out stuff in the post before you can login (at least that was the case when I did it years ago).
the maoster:
Very likely I’d sayI’m certainly no expert and I’m not au fait on tax affairs but would it be feasible to get an accountant to do it for you and then offset the accountant fees against tax? Dunno if that’s possible and I’m interested in any answers
That’s what we’d like you to think and be able to charge a large fee for what you can easily do yourself. (My former career). You’re still going to be left paying 80% of the fee.
As exit says, it leads you by the hand. But best to have a good understanding and know the answer that you’re expecting before you start.
If you’ve got spare cash then pay anything you earned above £50,700 (including reclaimed income tax) into a pension. That’ll then bring your taxable income below the level you have to start paying CB back.
Conor:
If you’ve got spare cash then pay anything you earned above £50,700 (including reclaimed income tax) into a pension. That’ll then bring your taxable income below the level you have to start paying CB back.
Yeah I had that mentioned to me earlier but I’ve onky got five days to do it, is it enough time to set up a SIPP and that? Or could I just pay the amount over 50k (the limit for the HICBC taper and also below the 40% threshold) into my current work pension that is already established?
Or I could just pay the tax charge of around £190 according to the calculations. Not sure how it works but if I file early enough I believe for such an amount they can take it back via adjusting your tax code?
For clarity I don’t have issue paying back what I owe, its more a case of I only want to pay back what I owe and no more! When it comes to registering can I do it now or do I need to wait until after April 5th for the new tax year?
I think the answer is it depends on your personal circumstances. i defer to those that have been an acountant in a past life but my understanding is unless you fit into a predefined box its hard work. A friend of mine was a field engineer and used his own car to get about. The company paid his fuel cost total in his wages rather than so much per mile, so hehad to claim back the the income tax on that but could only claim so much for the first so many miles and differing amounts for the other brackets. He ended up screwing it up and got a tax bill that then screwed up the next years tax so caused all sorts of issues as if you pay it bak on the drip they only take it off the most recent bill and you go into arrears with the origonal one.
I worked a lot of hours last year ,put the excess into the pension to avoid the supertax,but they still hit me with the child benefit tax.I have to check it again.
But ,yes,I agree ,no need to pay an accountant
toonsy:
Yeah I had that mentioned to me earlier but I’ve onky got five days to do it, is it enough time to set up a SIPP and that? Or could I just pay the amount over 50k (the limit for the HICBC taper and also below the 40% threshold) into my current work pension that is already established?Or I could just pay the tax charge of around £190 according to the calculations. Not sure how it works but if I file early enough I believe for such an amount they can take it back via adjusting your tax code?
You can set up a SIPP that quick but you can put it into your current one. If you’re only wanting to cover the amount that’s in the 40% bracket you only need to put in 60% of the amount you need to reduce as the rest will be recovered via tax relief, 20% of which will be automatically applied for by the pension provider, and the rest through self assessment. Remember to make sure you state you’re making the contribution out of take home pay otherwise they’ll not apply for the relief. So if you needed to reduce by £1000 you’d pay in £600 out of taxed take home pay. For £190 they can take it back via your tax code.
toonsy:
Conor:
If you’ve got spare cash then pay anything you earned above £50,700 (including reclaimed income tax) into a pension. That’ll then bring your taxable income below the level you have to start paying CB back.Yeah I had that mentioned to me earlier but I’ve onky got five days to do it, is it enough time to set up a SIPP and that?
Yes, you could set it up in 5 mins. It doesn’t need to be a SIPP, any PPP (Personal Pension Plan) would do. from a quick search :-
uswitch.com/pensions/pm-1/? … 2yEALw_wcB
Penfold - says it takes 5 mins and the annual fee would be 0.75% p.a. I wouldn’t go for a fixed fee such as Interactive
or
money.co.uk/pensions/ppc?tr … 0dEALw_wcB
You couldget a SIPP from Hargreaves Lansdown for 0.45% fee, but there would be fund fees on top
Or could I just pay the amount over 50k (the limit for the HICBC taper and also below the 40% threshold) into my current work pension that is already established?
I think with the time constraint now, it will either be simple or you will be chasing round who to talk to, how to pay, what bank details etc. I would just start a separate one for this purpose. THe HICBC starts from £50,099 so your £190 charge I think equates to about £51K so you need to put about £700 in to your new pension which will save you the £190 and be topped up to be £875 in your standalone pension. Use the Govt calculator to get the exact figures you need.
Or I could just pay the tax charge of around £190 according to the calculations. Not sure how it works but if I file early enough I believe for such an amount they can take it back via adjusting your tax code?
I know I would much rather the administration of a little extra pension on the side than starting self assessment!
For clarity I don’t have issue paying back what I owe, its more a case of I only want to pay back what I owe and no more! When it comes to registering can I do it now or do I need to wait until after April 5th for the new tax year?
you could register now, but I don’t think you should if you take my nothing to do with investments advice
Conor:
toonsy:
Yeah I had that mentioned to me earlier but I’ve onky got five days to do it, is it enough time to set up a SIPP and that? Or could I just pay the amount over 50k (the limit for the HICBC taper and also below the 40% threshold) into my current work pension that is already established?Or I could just pay the tax charge of around £190 according to the calculations. Not sure how it works but if I file early enough I believe for such an amount they can take it back via adjusting your tax code?
You can set up a SIPP that quick but you can put it into your current one. If you’re only wanting to cover the amount that’s in the 40% bracket you only need to put in 60% of the amount you need to reduce as the rest will be recovered via tax relief, 20% of which will be automatically applied for by the pension provider, and the rest through self assessment. Remember to make sure you state you’re making the contribution out of take home pay otherwise they’ll not apply for the relief. So if you needed to reduce by £1000 you’d pay in £600 out of taxed take home pay. For £190 they can take it back via your tax code.
I thought it was a case of dividing the extra by 1.25.
So,if you earned £10000 over the basic rate.£10000/1.25 =£8000.Put £8000 into the sipp,get £2000 tax relief(*1.25)claim the other £2000 through the tax return.That way ,you avoid supertax,
So,yes,you only pay £6000 in.
You pay £8000 into sipp,then get £2000 back.
That equals £6000