Advise on tax on bank interest during career break

psychic_teabag

Each tax year includes one 1st May and one 1st April ;-) Sorry, should have made it clearer that I meant the 1st May near the start of the tax year and the 1st April near the end.

ejv

CLAPTON wrote: »

for this tax year what do you expect your gross income to be (i.e. salary plus gross interest paid (excluding ISA))

and what is the equivalent for the next tax year?

My annual pay is £15K.I would be working 6 months this tax year and 6 months next tax year. So it would be approx £7.5k each tax year, which should be below taxable earning.As I said earlier, with some monthly bonus(variable) it may cross £8105, when this post becomes irrelevant.
As I'm sitting on the fence,and its new FY, I just asked.I wouldn't know the exact figure till Sep 2012, when I become a non-earner.
That's why I asked when I should be contacting the banks.Now or after Sep 2012?
I just started an HSBC 6% reg saver, and may think of FD 8% saver if I can avoid their £10 pm bank charges for the current account.(some loopholes mentioned in other forums)
Has a West Brom fixed saver maturing in Sep 2012.
Any advice appreciated....learning everyday:)

jem16

ejv wrote: »

Holy smoke.... tell me this is no joke.....:shocked:

No joke. A husband and wife can do what is most useful as far as mitigating tax is concerned.

Wouldn't HMRC raise any alarm bells as to the source of income of an unemployed person?:eek:

I doubt savings income would ring any alarm bells. After all a lot of retired people would fall into this category.

ejv

jem16 wrote: »

I doubt savings income would ring any alarm bells. After all a lot of retired people would fall into this category.

Oh yes...didn't realize that.
Thanx a lot:T

CLAPTON

ejv wrote: »

My annual pay is £15K.I would be working 6 months this tax year and 6 months next tax year. So it would be approx £7.5k each tax year, which should be below taxable earning.As I said earlier, with some monthly bonus(variable) it may cross £8105, when this post becomes irrelevant.
As I'm sitting on the fence,and its new FY, I just asked.I wouldn't know the exact figure till Sep 2012, when I become a non-earner.
That's why I asked when I should be contacting the banks.Now or after Sep 2012?
I just started an HSBC 6% reg saver, and may think of FD 8% saver if I can avoid their £10 pm bank charges for the current account.(some loopholes mentioned in other forums)
Has a West Brom fixed saver maturing in Sep 2012.
Any advice appreciated....learning everyday:)

to sign a R85 you have to say you will earn less than the tax free allowance in the tax year

as you don't know you will earn less than the tax free allowance then you can't sign one
so wait until after you finish work, add on the likely interest that will be received before 5th april 2013 and if that is less than the tax free allowance then sigh the R85
otherwise simply wait until; the end of the tax year and reclaim any interest if applicable (remember you have a 10% allowance for interest too)

ejv

CLAPTON wrote: »

reclaim any interest if applicable

Is this by Self Assessment or by sending R85 to banks?

CLAPTON wrote: »

(remember you have a 10% allowance for interest too)

Whatz this...never heard:o

CLAPTON

R85 is a form you send to the building societies or bank and tells them to pay you gross


you reclaim the back tax by completing a R40 (downloadable from the HMRC website) ; no need to self assess


you may or may not remember that Gordon abolished the 10% tax rate;
well almost as it is still preserved if your earnings are less than 8105 + 2710 and you also having income from saving interest

ejv

CLAPTON wrote: »

Gordon abolished the 10% tax rate;
well almost as it is still preserved if your earnings are less than 8105 + 2710 and you also having income from saving interest

Sorry ...couldn't understand anything above.:o
Where does this £2710 come from?
Can u pl explain....if u don't mind:o
(Never knew about R85 or R40)

jem16

ejv wrote: »

Where does this £2710 come from?

From HMRC. It's the 10% rate for those that it applies to.
http://www.hmrc.gov.uk/rates/it.htm

Not everone is able to use the 10% tax rate and it only applies to someone with a total income of less than £10,815 and where part or all of it is interest from savings.

princessdon

I completed a form to reclaim when I was on my maternity leave - I took 9 months extra unpaid and so paid no tax that year.

When I started I was a tax payer - but the end of the financial year wasn't and so reclaimed it.

Only problem was I am a regular charity donator and had donated gift aid - I never found out what happened to those and I really hope they never were penalised as I was always intending to return, but my D was seriously ill and in hospital till almost her 1st birthday so couldn't return earlier.