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  • FIRST POST
    • MSE Eesha
    • By MSE Eesha 25th Feb 16, 12:44 PM
    • 67Posts
    • 19Thanks
    MSE Eesha
    The new personal savings allowance means some will be better off earning LESS interes
    • #1
    • 25th Feb 16, 12:44 PM
    The new personal savings allowance means some will be better off earning LESS interes 25th Feb 16 at 12:44 PM
    This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.





    Please click 'post reply' to discuss below.
Page 2
    • zagfles
    • By zagfles 7th Mar 16, 7:08 PM
    • 11,123 Posts
    • 9,144 Thanks
    zagfles
    As i predicted the country is just beginning to wake up to Mr Osborne's generous "gift" from the last budget. It is a whole world of confusion and lots of people will pay lots more tax. It wasn't a generous allowance. It was another tax raid in disguise.
    Originally posted by C_Mababejive
    Really? Who's going to pay more tax as a result of the personal savings allowance?
    • C_Mababejive
    • By C_Mababejive 8th Mar 16, 8:10 AM
    • 9,954 Posts
    • 9,092 Thanks
    C_Mababejive
    Really? Who's going to pay more tax as a result of the personal savings allowance?
    Originally posted by zagfles
    I'll hold my hands up, im not an expert on this and there are plenty on this forum who are. Maybe i need enlightenment? If there is any to be had i shall gladly try to absorb it !

    No,i just have a bad feeling about it. Something pitched as a great gift doesnt seem to be that great for many people. Bundle that up with a good dollop of confusion and misinformation.

    If HMG expects to raise more than £6.8B extra revenue then clearly a large group of people are paying more.

    Once such schemes are established,,well they can then tweak rates

    http://citywire.co.uk/money/summer-budget-osborne-hikes-tax-on-dividends/a825373

    We still havent heard when his temporary rise in VAT will come back down.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • roddydogs
    • By roddydogs 8th Mar 16, 9:01 AM
    • 5,784 Posts
    • 2,396 Thanks
    roddydogs
    HMRC cant get anything right ATM, how they gonna keep up with people having more than the £1000 interest when people will be adding/withdrawing/closing a/cs all the time?
  • jamesd
    HMRC cant get anything right ATM, how they gonna keep up with people having more than the £1000 interest when people will be adding/withdrawing/closing a/cs all the time?
    Originally posted by roddydogs
    By using the normal reporting that the places which operate the accounts have to do. They already have to tell HMRC, HMRC will just start to automatically use that information instead of waiting for people to tell them about it. You will be able to use your Personal Tax Account to check the numbers. You already have a Personal Tax Account even if you didn't know about it yet.
  • jamesd
    If HMG expects to raise more than £6.8B extra revenue then clearly a large group of people are paying more.
    Originally posted by C_Mababejive
    That's from the change to dividend taxation, not the Personal Saving Allowance. The PSA itself can't raise more tax but what can is automatically using the reports from financial institutions about savings interest paid.
    • FOREVER21
    • By FOREVER21 8th Mar 16, 1:15 PM
    • 1,420 Posts
    • 933 Thanks
    FOREVER21
    By using the normal reporting that the places which operate the accounts have to do. They already have to tell HMRC, HMRC will just start to automatically use that information instead of waiting for people to tell them about it. You will be able to use your Personal Tax Account to check the numbers. You already have a Personal Tax Account even if you didn't know about it yet.
    Originally posted by jamesd
    I realise the personal tax account is. still under development, but I wonder how accurate it will be.

    I have signed up with HMRC and looked at my account, it is already showing 2 incorrect entries relating to interest earned and tax paid on that interest. Worse still these incorrect figures have also been recorded under the next tax year.

    So for me it does not bode well,and I will be involved in extra work contacting HMRC. I will wager it will not be just me.
  • jamesd
    I'm sure that it won't be just you but do expect the glitches to be sorted out over time. It can't be any more accurate than the data provided to that system and I'm sure that it'll also end up getting a lot of related data cleaned up.
    • C_Mababejive
    • By C_Mababejive 8th Mar 16, 5:35 PM
    • 9,954 Posts
    • 9,092 Thanks
    C_Mababejive
    That's from the change to dividend taxation, not the Personal Saving Allowance. The PSA itself can't raise more tax but what can is automatically using the reports from financial institutions about savings interest paid.
    Originally posted by jamesd
    So as an example,,and anyone feel free to chip in with this one..

    In the forthcoming tax year 2016/17 if someone receives £10k dividends and they are a basic rate taxpayer, how much tax will they pay?

    How much would they have paid prior to this new arrangement?


    If the same punter is a higher rate taxpayer, what will those tax figures be?
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • roddydogs
    • By roddydogs 10th Mar 16, 9:20 AM
    • 5,784 Posts
    • 2,396 Thanks
    roddydogs
    I'm sure that it won't be just you but do expect the glitches to be sorted out over time. It can't be any more accurate than the data provided to that system and I'm sure that it'll also end up getting a lot of related data cleaned up.
    Originally posted by jamesd
    Your faith in the HMRC is to be admired, but I reckon it will be a right pigs ear, as usual.
    • C_Mababejive
    • By C_Mababejive 10th Mar 16, 5:34 PM
    • 9,954 Posts
    • 9,092 Thanks
    C_Mababejive
    I realise the personal tax account is. still under development, but I wonder how accurate it will be.

    I have signed up with HMRC and looked at my account, it is already showing 2 incorrect entries relating to interest earned and tax paid on that interest. Worse still these incorrect figures have also been recorded under the next tax year.

    So for me it does not bode well,and I will be involved in extra work contacting HMRC. I will wager it will not be just me.
    Originally posted by FOREVER21
    There you go you see and thats how it will play out. We are moving from a situation where you declare and pay to one where they take your money and you have to try and check, become an accountant overnight, register and login to their rubbish/inaccurate/in development personal tax site and then YOU have to demonstrate they are wrong and try to get the money back.

    It is nothing short of theft.

    If you regularly shop at tesco, how would it be if they auto debited £100 out of your account ,you made enquiries and they said,,well you spent £100 the last few weeks so we thought we would take the money now as you will soon owe it to us anyway..
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • Maribel
    • By Maribel 8th May 16, 8:48 AM
    • 5 Posts
    • 0 Thanks
    Maribel
    Really interesting stuff and eye opening comments from all of you. It leaves me with a big question: when it comes to joint accounts, wouldn't it best to contact the bank and ask them to remove the name of the higher tax payer just about the financial year is going to end? I presume that in this scenario the bank/building society would pass the necessary information concerning interest earnt to HMRC but that it would only concern the remaining account holder. Am I right?
    • badmemory
    • By badmemory 8th May 16, 3:46 PM
    • 231 Posts
    • 203 Thanks
    badmemory
    The people this may catch out are those higher rate tax payers who have only had 20% tax deducted from their savings and haven't paid the extra tax due. So HMRC will be able to go back a few years & get the back tax. After all a higher rate tax payer is more likely to have savings than a basic rate tax payer does. Then over the year they will have to pay the tax as they go rather than at the end of the year. They may not put the tax rates up but they can certainly try to get them in earlier.
    • vacheron
    • By vacheron 12th Oct 16, 8:24 AM
    • 622 Posts
    • 516 Thanks
    vacheron
    This is the part I just cannot reconcile....

    The HMRCs own Website (link) clearly states that the amount of personal savings allowance depends on my "adjusted net income".

    The HMRC definition of "adjusted net income" (link) includes savings interest income, but then allows the deduction of the "personal savings allowance" tax relief.

    How do I know which amount of personal savings allowance tax relief to deduct (£1000 or £500) as I will not know if my "adjusted net income" exceeds £43,000 until the calculation is complete?

    In my mind, this ends up as a total catch 22 (or in excel terms, a "circular reference") situation if your savings income is between £500 and £1000 and your non savings income exists in the £42,500-£43,000 "twilight zone"?
    Last edited by vacheron; 12-10-2016 at 8:29 AM.
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • zagfles
    • By zagfles 12th Oct 16, 9:45 AM
    • 11,123 Posts
    • 9,144 Thanks
    zagfles
    This is the part I just cannot reconcile....

    The HMRCs own Website (link) clearly states that the amount of personal savings allowance depends on my "adjusted net income".

    The HMRC definition of "adjusted net income" (link) includes savings interest income, but then allows the deduction of the "personal savings allowance" tax relief.

    How do I know which amount of personal savings allowance tax relief to deduct (£1000 or £500) as I will not know if my "adjusted net income" exceeds £43,000 until the calculation is complete?

    In my mind, this ends up as a total catch 22 (or in excel terms, a "circular reference") situation if your savings income is between £500 and £1000 and your non savings income exists in the £42,500-£43,000 "twilight zone"?
    Originally posted by vacheron
    It looks like they've changed the factsheet - maybe some smarta**e trying to "simplify" it but instead made it more complicated!

    The previous factsheet (which I can't find now) made it clear that you are deemed a higher rate taxpayer for the purposes of this if you would have paid higher rate tax had the PSA not existed.

    The legislation appears to still reflect this: http://www.legislation.gov.uk/ukpga/2016/24/section/4/enacted
    • vacheron
    • By vacheron 12th Oct 16, 1:33 PM
    • 622 Posts
    • 516 Thanks
    vacheron
    Thanks zagfles, at least it's not just me!

    The more I'm reading the HMRC site the more confusion and contradiction I am finding. It seems possible to earn an amount way above the point at which you are considered a "high rate taxpayer", yet not be required to a penny in additional rate tax.

    It is also possible to pay income tax earn way below the 32,000 higher rate threshold but still be considered a higher rate taxpayer due to other earnings which are taxed in completely different ways, but are then considered as income for the purposes of other income tax based allowance eligibility.

    I would go on, but I don't want to move this thread off topic. I may start a new thread somewhere else though.

    ... I knew I shouldn't have got myself involved!
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • vacheron
    • By vacheron 13th Oct 16, 8:54 AM
    • 622 Posts
    • 516 Thanks
    vacheron
    Hi zagfiles.

    I was surprised this morning when I re-loaded the HMRC page I linked to yesterday to find that the savings allowance tax relief (along with the dividends allowance as well) have now been deleted less than 24 hours after I posted the error on here. (I believe you must have read that yesterday too)?

    I'm glad it has been corrected, but what concerns me is that they have completely omitted to list an edit which removed 2 of the 4 tax relief items in the "page updated" details at the bottom which still show the last update was on the 4th of February 2016!

    The wayback machine tells a different story though as they have an archive from the 17th of August 2016 where it is clearly listed. Sneaky beggars!

    As I didn't inform them perhaps someone else reading the thread did. Either that or big brother is watching us!
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
    • zagfles
    • By zagfles 13th Oct 16, 9:12 AM
    • 11,123 Posts
    • 9,144 Thanks
    zagfles
    Hi zagfiles.

    I was surprised this morning when I re-loaded the HMRC page I linked to yesterday to find that the savings allowance tax relief (along with the dividends allowance as well) have now been deleted less than 24 hours after I posted the error on here. (I believe you must have read that yesterday too)?

    I'm glad it has been corrected, but what concerns me is that they have completely omitted to list an edit which removed 2 of the 4 tax relief items in the "page updated" details at the bottom which still show the last update was on the 4th of February 2016!

    The wayback machine tells a different story though as they have an archive from the 17th of August 2016 where it is clearly listed. Sneaky beggars!

    As I didn't inform them perhaps someone else reading the thread did. Either that or big brother is watching us!
    Originally posted by vacheron
    That was quick - I've complained about wrong info on gov.uk websites before and it's usually taken months to get it fixed! I didn't complain about this one. We've obviously got readers in high places. Maybe it was Martin
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