Tax Evader without even knowing it?

soulsaver

Another maybe obvious question: His interest earned is not from ISA's or NS&I savings as all the isa interest is tax free and the NS&I investments may be tax free and wouldn't count towards his income total.
On the other hand Money Market 'funds' such as Fidelity Cash are 'income' too, not, as some think 'cos they're a fund, capital gains.

timydog

jem16 wrote: »

I'll assume you mean 08/09 tax year. 40% tax band started at £34,600 plus personal allowance of £6035 so a total of £40,635.
So with an income of £47k then yes 40% tax should have been paid.

As already said it is a prosecutable offence to fail to declare it to HMRC. He really needs to inform them asap.

Why do they not pick this up automatically, there must be hundreds maybe thousands who go un-noticed, never to pay what they owe, its totally un-believable, gobsmacked!

If the individual does not realise, does not know, then the HMRC should be checking surely?


The funny thing is a couple of years back, he did not work for the whole tax year, off sick, only got statuory sick pay, so at the end of the tax year, he claimed back the tax he paid on his savings. But the year before, by my calculations he should have paid the HMRC £700 in owed tax on his savings interest, due to breaking the 40% tax threashold, as combined interest on his savings and PAYE took him over the 40% tax threshold.

Yet he was still paid back his allowance, the HMRC never even picked up that they were paying him back money, yet the previuos year he owed them money. Crazy i tell you, its no wionder the country is in a mess!

jem16

timydog wrote: »

If the individual does not realise, does not know, then the HMRC should be checking surely?

Presumably they should but they will need to tie up earnings and savings.

However ignorance is no defence.

A few questions that you haven't answered though;

1. Were any pension payments made? These attract tax relief.

2. Were any of the savings in ISAs or other tax free accounts?

timydog

jem16 wrote: »

However ignorance is no defence.

A few questions that you haven't answered though;

1. Were any pension payments made? No, never

2. Were any of the savings in ISAs or other tax free accounts? No, never

I wonder how many other people are in similar situations without even knowing?

jem16

timydog wrote: »

I wonder how many other people are in similar situations without even knowing?

Does it matter? Your friend knows and now should do something about it.

You need to llok at the two questions i asked - they might help reduce the tax bill due.

timydog

jem16 wrote: »

Does it matter? Your friend knows and now should do something about it.

You need to llok at the two questions i asked - they might help reduce the tax bill due.

I am onto it for him, he is in no way a decieptfull person, still interested in other peoples experiences and comments though? Crazy system.:rotfl:

jem16

timydog wrote: »

Crazy system.:rotfl:

I'm not sure why you think it's a crazy system.

It's always been up to the individual to be aware of their own tax situation and to make sure they know about it.

juicyjude

The only income I receive now is from savings interest as I retired the beginning of April. I have registered for gross interest on my savings. Once (if at all) my income for this year 09/10 reaches £6,475 I will have to inform the tax office and will then have to register again for net interest. Is this correct?

Hungerdunger

juicyjude wrote: »

The only income I receive now is from savings interest as I retired the beginning of April. I have registered for gross interest on my savings. Once (if at all) my income for this year 09/10 reaches £6,475 I will have to inform the tax office and will then have to register again for net interest. Is this correct?

From the notes which accompany the R85:

If your income goes up and that means that you should start paying tax,
you must tell each bank or building society with whom you have an
account. It is not their responsibility to check that the information you
have given on form R85 is true or up to date. Please note however that
we may check the information you have given.

timydog

Hungerdunger wrote: »

From the notes which accompany the R85:

For info!:beer: