Tax Evader without even knowing it?

WaxiesDargle

Interesting thread

I may be about to go over the threshold of 40%...by around £5000
£21,000 of my income is from a company pension.

I have no savings yet as such, just salary paid into my current account

jem mentioned on here about tax relief if you get a pension...can anyone (jem?) explain that a bit more. Thanks

ChiefGrasscutter

WaxiesDargle wrote: »

Interesting thread

jem mentioned on here about tax relief if you get a pension...can anyone (jem?) explain that a bit more. Thanks

The reply from 'jem' was in respect of tax relief obtainable on your total income if you PAID INTO a pension during the tax year, not if you were/are RECEIVING a company pension. Any pension received is simply another source of income to be added to all other sources of income and is taxable as such under the income tax rules.

As others have pointed out, we the tax payer have a duty to inform I.Revenue about our tax affairs and pay the extra higher rate tax if due. Ignorance of whether you are suddenly now in the higher tax band and hence required to pay a higher rate of tax is no defence. Failure to do do may result in fines and penalty payments which are related to the size of the underpayment found.

In the USA the penalities for non declaration or under declaration of income are so severe and the Internal Revenue Service so feared that voluntary and deliberate overpayment of tax is common to ensure you are in credit with them.

bagsacash

but ignorance is no defence.

Only if you're an Member of Parliament

timydog

ChiefGrasscutter wrote: »

The reply from 'jem' was in respect of tax relief obtainable on your total income if you PAID INTO a pension during the tax year, not if you were/are RECEIVING a company pension. Any pension received is simply another source of income to be added to all other sources of income and is taxable as such under the income tax rules.

As others have pointed out, we the tax payer have a duty to inform I.Revenue about our tax affairs and pay the extra higher rate tax if due. Ignorance of whether you are suddenly now in the higher tax band and hence required to pay a higher rate of tax is no defence. Failure to do do may result in fines and penalty payments which are related to the size of the underpayment found.

In the USA the penalities for non declaration or under declaration of income are so severe and the Internal Revenue Service so feared that voluntary and deliberate overpayment of tax is common to ensure you are in credit with them.

He is in the process of fully paying up all that is owed, so my advice to anyone is watch what you earn and unearn, he thought he was only liable if his earnt income went above the 40% tax bracket, then i educated him, that it is combined earnt and unearnt.

ohit

The OP mentioned the last 15 years.

Isn't it only the last 6 years that matter when considering HMRC payments/issues etc.?

timydog

ohit wrote: »

The OP mentioned the last 15 years.

Isn't it only the last 6 years that matter when considering HMRC payments/issues etc.?

As far as i know, he is calculating the last 15 years, and making a cheque out for the full sum. A guessimation around £20k i reckon?

ChiefGrasscutter

ohit wrote: »

The OP mentioned the last 15 years.

Isn't it only the last 6 years that matter when considering HMRC payments/issues etc.?

It is my understanding that if a pattern of deliberate fraud is established by the I.Revenue during the normal 6 year period as part of their investigations then they do have the power to look up to 20 years.
I am not an expert in tax matters and this reply should not be regarded as definitive comment on the matter.

D1zzy

bagsacash wrote: »

but ignorance is no defence.

Only if you're an Member of Parliament

or a Banker

Pumpkinface_2

hotkee wrote: »

You only have to do tax return if you are deemed to be high rate earner (think thats above 40k a year) or you are a company director etc.

Earnings - basic rate 10%, then 20% to 37k, anything above that is 40%.

Savings - everyone pays 20% on all bank accounts unless you are a child.

So no your friend hasn't got away with anything - any overpayment or underpayment in earnings is usually corrected in the next years earnings PAYE/NI payments.

This post is soo wrong on so many counts.

You should be doing a tax return if you believe you have any tax to pay and of course if you feel you have overpaid doing a tax return is the easiest way of triggering a refund.

Banks normally deduct 20% tax at source, but this does not mean that is what is due. If you are a higher rate tax payer then you have to pay higher rate interest on earnings. Banks do not know what earnings from employment are and so use the base rate of taxation unless told otherwise.

Children are subject to the exact same tax laws as adults.

Over and underpayments through PAYE might be corrected in the next years code, but the system is not so sophisticated that it can connect every employer to every bank to the Inland Revenue.

Cook_County

Penalties may however be significantly reduced if the tax evader uses the amnesty to be launched on 1 September 2009 - the so-called "new disclosure opportunity"...