Just Gone To 40% Tax Level

calypso_rhapsody

Hartson - you should complete a tax return and submit it to HMRC by 30 Sept after the tax year end if you want HMRC to work out how much you owe (or 31 Jan if you are happy to do the calculation yourself). Tax due should be paid by 31 Jan.

There are situations where you might have to make payments on account in advance - depends on how much over the 40% limit you are (if a lot, check the HMRC website ...)

Hartson_2

calypso_rhapsody wrote: »

Hartson - you should complete a tax return and submit it to HMRC by 30 Sept after the tax year end if you want HMRC to work out how much you owe (or 31 Jan if you are happy to do the calculation yourself). Tax due should be paid by 31 Jan.

There are situations where you might have to make payments on account in advance - depends on how much over the 40% limit you are (if a lot, check the HMRC website ...)

Thanks. So there is no form you can fill in at the bank to inform them to take 40% off?

MoneySaverLog

You inform the revenue and they send you a form to complete every year to say how much interest you have received, you then have to pay them I believe.

Not lucky enough to be in this situation but having a SIP and AVCs into a pension is going to be a way to cover me at the point where I just cross over into the 40% bracket. It will be a few years away yet though unless I get promoted.

gadgetmind

Hartson wrote: »

Thanks. So there is no form you can fill in at the bank to inform them to take 40% off?

No, that would quickly get too complicated.

And as I've been in the 40% bracket for quarter of a century, and have never paid 40% tax on bank interest, you really need to consider some switcheroos to make sure you don't either!

Hartson_2

gadgetmind wrote: »

No, that would quickly get too complicated.

And as I've been in the 40% bracket for quarter of a century, and have never paid 40% tax on bank interest, you really need to consider some switcheroos to make sure you don't either!

How do you mean? How have you managed to avoid 40% savings tax despite being a 40% tax payer?

MoneySaverLog

Probably has a partner who is not paying 40% and puts savings with them :-)

Edit: ISA's however would be better off in your name :-)

oldvicar

Hartson wrote: »

If you are a 40% tax-rate payer, do you need to inform the bank to take off another extra 20%, or do they do it automatically?

Or do you just have to send a cheque to HMRC at the end of the year?

Hartson wrote: »

Thanks. So there is no form you can fill in at the bank to inform them to take 40% off?

The bank will NEVER take the 40% tax, only ever the first 20%.

For the extra 20% due you must account to HMRC. Most typically by filling in a tax return, although some posters on these forums say they just write and tell them how much more they owe and why (with cheque enclosed).

You then either pay HMRC what is owed directly, by cheque, or preferably online. But if it is only a small amount owed (up to £2,000) you can, and HMRC seem to prefer, have your PAYE code changed so that tax is recovered bit by bit during the following year.

gadgetmind

Hartson wrote: »

How do you mean? How have you managed to avoid 40% savings tax despite being a 40% tax payer?

Because I am but a pauper with no savings to my name unless you include NS&I bonds, ISAs and pension, all of which are tax exempt.

My wife OTOH has plenty of cash savings and a lot of assets that generate dividend income. As she doesn't work, we pay no tax on any of this income.

guitarman001

I don't understand.

I'm a 20% tax-rate payer. I get taxed on salary then the remainder can go into a savings account. What part of that gets taxed!?

gadgetmind

guitarman001 wrote: »

I'm a 20% tax-rate payer. I get taxed on salary then the remainder can go into a savings account. What part of that gets taxed!?

The interest you earn in the savings account will get taxed at source by the bank or building society.