Tax Rates 2012/13 Article Discussion

Cautiousiscool

Like a lot of people, I guess, "in the current economic climate" I now find myself being paid a changeable amount per month on a casual basis as opposed to my previous job where I was a permanent member of staff, on an annual salary which was paid monthly. I didn't really have to think about income tax before because my pay was always the same every month. What confuses me about my current situation is that my employer is deducting 20% income tax from my monthly pay but I should get the first £8,000-odd tax-free. (I don't anticipate having earned much more than about £11K by the end of the tax year, so I should only pay 20% on about £3K of my earnings.) Also, because my hours change from week to week, my employer can't possibly know exactly how much I will have earned by the end of the tax year. In this situation, is it normal to pay 20% tax on everything and then get a rebate at the end of the year? Any wisdom gratefully received.

ceeforcat

What is your tax code - presumably BR. What forms did you fill in when you started? Did you hand in a form P45?

malc_b

Can some explain how paye and cgt are combined?

Or are they separate, which is to say, for example, I could earn £41,450 and pay 20% tax on £32,010 plus I could also have a capital gain over £10,600, say £110,600 and I'd pay 18% of £100,000.

zygurat789

malc_b wrote: »

Can some explain how paye and cgt are combined?

Or are they separate, which is to say, for example, I could earn £41,450 and pay 20% tax on £32,010 plus I could also have a capital gain over £10,600, say £110,600 and I'd pay 18% of £100,000.

The bands are set in stone so all the gain would be taxed at 28%.
If you did not use all your £32010 then the unused part woul, for the capital gain, be taxed at 18%.
Its £10900 by the way

picard1109

I've just had a letter from HMRC telling me that my tax code for this year is D0, for what is my PAYE job. That means I'll be paying 40% tax on ALL of my income, not just the segment above the PA + basic, doesn't it?

I do some freelance work on an ad hoc basis and have an accountant complete my tax return, but that isn't my main job, the PAYE one is.

Have they made a mistake or have I fallen into some tax trap?

zygurat789

picard1109 wrote: »

I've just had a letter from HMRC telling me that my tax code for this year is D0, for what is my PAYE job. That means I'll be paying 40% tax on ALL of my income, not just the segment above the PA + basic, doesn't it?

I do some freelance work on an ad hoc basis and have an accountant complete my tax return, but that isn't my main job, the PAYE one is.

Have they made a mistake or have I fallen into some tax trap?

No, it means that HMRC want your employer to deduct this tax fron your PAYE earnings. Your PA and basic rate tax will be used against your PAYE income.
HMRC want to receive any tax you are due to pay ASAP this is their way of achieving that aim.
What does the letter you have received give as the reason?

jem16

picard1109 wrote: »

I've just had a letter from HMRC telling me that my tax code for this year is D0, for what is my PAYE job. That means I'll be paying 40% tax on ALL of my income, not just the segment above the PA + basic, doesn't it?

Yes the D0 code would mean that all of the income that the code is attached to would be taxed at 40%.

Is it definitely being attributed to your main employment?

I do some freelance work on an ad hoc basis and have an accountant complete my tax return, but that isn't my main job, the PAYE one is.

Have they made a mistake or have I fallen into some tax trap?

If the D0 is being attached to your main employment in place of your normal tax code then yes it sounds like something has gone wrong somewhere as it would probably make more sense to use the tax code against the employment.

How do you normally pay tax on your freelance work? What income do you make freelance and is it regular?

Dee76

Please can you tell me if the married couples double CGT allowance still applies on the sale of a second home, even if it is only the husband who's named on the property deeds, or do the deeds need to be in both names to qualify for the joint allowance?
Thanks for any info.

00ec25

Dee76 wrote: »

Please can you tell me if the married couples double CGT allowance still applies on the sale of a second home, even if it is only the husband who's named on the property deeds, or do the deeds need to be in both names to qualify for the joint allowance?
Thanks for any info.

there is no such thing as a married couples CGT allowance.

It is a personal allowance applicable to the individual owner so yes both of you have to be on the deeds so each can claim their own allowance

also note that HMRC are getting good at spotting people transferring ownership just before selling and there are posts on this board where HMRC have refused to allow the "new" owner to claim on the basis that the only reason for the transfer was to evade tax . To avoid this it is best to make the transfer well before (eg 6 months) the property goes on sale let alone receives an offer/exchange of contracts

jimmo

Dee76 wrote: »

....even if it is only the husband who's named on the property deeds, or do the deeds need to be in both names to qualify for the joint allowance?
Thanks for any info.

If that is because it was the husband’s home before marriage switching to joint ownership now could be a serious mistake.

This thread deals with some of the issues that may be involved.

https://forums.moneysavingexpert.com/discussion/comment/61996511#Comment_61996511