Claiming back the extra 20% tax

mrbrown

Hi all,
Due to the nature of my job, some years I fall within the 40% tax bracket. As soon as I can, I submit my accounts to my accountant. Im very good at logging my income and expenses, so have a fare idea of how much - if at all - I broach the 40% bracket.

I realised the other day that if youre a 40% tax payer, you need to apply to the HMRC to claim the additional 20% tax payment. Is this right? How would I go about doing this? Is this something my accountant shoudl have told me about? Can I claim for previous years?
Thanks

le_loup

No, you don't get it back if you are a 40% tax payer. It will all work out from your self assessment.
You have an accountant, ask him, that's why you pay him.

thenudeone

le_loup wrote: »

No, you don't get it back if you are a 40% tax payer. It will all work out from your self assessment.

You DO get a tax adjustment if you are a higher rate taxpayer. It will be adjusted for in your tax return, but not all higher rate tax payers are subject to self assessment (I wasn't for several years).

If you are not subject to self-assessment, you should write to your tax office giving full details, and they will usually adjust your tax code so that you get the benefit, although such a request may trigger a requirement to do a tax return in future.

Once they know about it, hmrc will usually adjust your tax code from then onwards, so that any adjustment after the year end is eliminated or at least reduced.

BoGoF

thenudeone wrote: »

You DO get a tax adjustment if you are a higher rate taxpayer. It will be adjusted for in your tax return, but not all higher rate tax payers are subject to self assessment (I wasn't for several years).

If you are not subject to self-assessment, you should write to your tax office giving full details, and they will usually adjust your tax code so that you get the benefit, although such a request may trigger a requirement to do a tax return in future.

Once they know about it, hmrc will usually adjust your tax code from then onwards, so that any adjustment after the year end is eliminated or at least reduced.

OP did mention submitting accounts so could be read as self-employed and therefore completing Tax Returns?

mrbrown

Thanks guys.

I give my outgoing/income spreadsheet to my accountant, and she fills in the self assessment form online based on the figures Ive given her.

Just to clarify: I don't need to do anything - HMRC will automatically pay the 20% into my SIPP?

Thinking about it, how can they pay that 20% into my SIPP? - they dont know my SIPP details.

le_loup

thenudeone wrote: »

You DO get a tax adjustment if you are a higher rate taxpayer.

Yes, of course you do - IF YOU ARE PAYING INTO A PRIVATE PENSION - only where did the OP mention that?
Ignore my response.

jamesd

HMRC does not pay the additional 20% into your SIPP. Just the 20% for basic rate tax. The higher rate part is either refunded to you or used to reduce how much tax is due.

mrbrown

Thanks guys.

So to clarify: My accountant submits the Self Assessment form on the HMRC website, and HMRC automatically either refunds the higher amount or uses it to reduce how much tax is due? Where/how do I choose between the 2 options?

noh

mrbrown wrote: »

Thanks guys.

So to clarify: My accountant submits the Self Assessment form on the HMRC website, and HMRC automatically either refunds the higher amount or uses it to reduce how much tax is due? Where/how do I choose between the 2 options?

If your tax return contained the amounts paid into pension funds then the amount of tax you needed to pay would be adjusted accordingly.
If your tax return did not detail pension payments then you need to claim back the overpaid tax.

jamesd

Yes, HMRC will do it automatically. You don't get to choose unless a refund is due after taking into account all of the other tax due in the year.