HMRC overkill

Newly_retired

I am in receipt of a very small foreign pension - around £25- £26 per month. I understand only 90% of it is taxable, at 20%.
I make that around £55 tax due p.a.

When it began I informed HMRC and they included it in my tax code on my main pension.
Now that say they want me to fill in a self-assessment form.
I thought they were over worked and understaffed. Why would they want the bother of extra work? I certainly don't.
I have been honest and open about this small foreign pension, so why have they changed their minds about including it in my PAYE code after 3 years?

All my other pension income is already taxed, and so is my savings interest but now I'm going to have to document it all and send in P60s etc.
Grrr!

System

I agree that it seems wrong for pensioners to have the complication of completing Self Assessment forms.

However, as the system stands, many pensioners are asked to complete SA because of the age related allowances that reduce if your income exceeds an upper limit.

For the 2011-12 tax year the allowance for ages 65 - 74 is £9,940 and the income limit is £24,000. So, if your total income exceeds £24K then HMRC often put you into the SA system.

If you wish, you can register with HMRC's online system and complete your tax return online.

You should not have to send in any paperwork at all (No P60s reqd.)

BoGoF

Unfortunately foreign income, regardless of the amount, makes you a Self Assessment case.

Not sure why you think you need to send your P60's in if you have to complete a Tax Return - you don't.

Newly_retired

Thanks for replies.
My pensions total less than £24000pa.
So what documents if any do I need to collect in order to complete self assessment?

System

There is a demo available for the HMRC online SA system : Demo Link

There is lots of info about Self Assessement on the HMRC pages : Link

BoGoF

Newly_retired wrote: »

Thanks for replies.
My pensions total less than £24000pa.
So what documents if any do I need to collect in order to complete self assessment?

Obviously you need your P60's to complete the form but you merely fill the form in with the P60 etc information but you don't send anything other than the form

Newly_retired

Thanks to you both for the info and links.

chrismac1

You might have been under the impression that HMRC are a public service organisation dedicated to reasonably efficient administration, and twenty years ago I would have said that was fair enough. No longer.

They are a tax-collecting organisation focussed on going the long way around as much as possible and asking all and sundry to send them the same information two, three or even four times. their fines and penalties are often laughable. They hide behind their silly procedures, at times for example refusing my request to simply add a postcode on to an address in their database which did not have a postcode on it. Yet when it suits them - whether through their useless database or deliberate manual intervention I know not - their silly procedures don't stop them from deleting submitted tax returns, then of course fining the taxpayer for "late submission".

Commonsense plays no part in any aspect of HMRC's operations so far as I can tell. Every month in my client database they come up with yet another howler or silly letter, which is why there are far too many accountants in this country in my view. But unless and until HMRC radically improves things (of which there is no sign yet) I will still have my fair share of pensioner tax return clients, like yourself, who really should not have to have the hassle and potential aggravation of dealing with HMRC.

Pee

I don't know if this will be the case with you but sometimes they issue self assessment returns something like every three years and won't bother you in between.

jennifernil

Once you have all your figures gathered, it will only take a few minutes to complete the SA form, it is very straightforward.

John_Pierpoint

jennifernil wrote: »

Once you have all your figures gathered, it will only take a few minutes to complete the SA form, it is very straightforward.

Make that a day.

Allow at least a morning to play with the on-line system - in the library if you don't have a computer with a good broadband connection.

The on-line system has two joys:

1. You can play with it endlessly, only when you are full happy do you submit the return. [I put in the first page name and address type stuff and went to the end and filled in signature type stuff and sent it for checking. Of course I got errors all over the place, but I methodically then worked through each section. Came back to it the next day etc.
It is all saved out there in "the cloud" for you ]

2. When you eventually get it right and submit it, you immediately get a reference and a tax calculation. Job done if you pay there and then for any additional tax owing. No waiting and wondering if the paper return has got lost in the system.