Self Assessment problems

50Twuncle

I am trying to fill in last TY's on-line SA - And have come across a problem

I earned interest last TY on several investments that are paid net of income tax - yet when I try to add these - they assume that they have been paid gross and try to tax me again

How do I ensure that I do not pay double tax ?

I think that I am going to have to do it by snail mail - what is the cut off date for this ?

chrismac1

If you put the interest in the "net interest" box the tax return calculation does indeed add back 25% of it to arrive back at the gross figure. But the tax payable will only change if your total income from all sources takes you into the higher rate tax brackets. Because further on in the calcualtion you get a deduction for the basic rate element.

The gross income must be taken into account when assessing whether someone falls into the higher brackets, hence the grossing up adjustment is necessary and not merely a not well thought out part of the tax return.

System

21Twinkle wrote: »

I am trying to fill in last TY's on-line SA - And have come across a problem

I earned interest last TY on several investments that are paid net of income tax - yet when I try to add these - they assume that they have been paid gross and try to tax me again

How do I ensure that I do not pay double tax ?

I think that I am going to have to do it by snail mail - what is the cut off date for this ?

It's working as it should. The screen where you enter the taxed interest only asks for the net figure. As tax is always deducted at 20% the computer system can automatically calculated the gross figure and tax deducted.

When you get to the tax calculation screen it will show the gross interest towards the start and the credit for taxed deducted at source towards the end.

50Twuncle

ceiberman wrote: »

It's working as it should. The screen where you enter the taxed interest only asks for the net figure. As tax is always deducted at 20% the computer system can automatically calculated the gross figure and tax deducted.

When you get to the tax calculation screen it will show the gross interest towards the start and the credit for taxed deducted at source towards the end.

Sorry - it did not do this for me - I have calculated that last TY - I owe them about £5 - to be offset by £36 travelling expenses - but the on-line calculator has worked out that I owe HMRC almost £300 - which, when I produced a "yourfullcalculation.pdf" clearly shows that they are working on GROSS tax when I put down the NET figure
I need to send in the return by snail mail - but in what form ?
ie) Do I have to send in copies of proof of income or just a carefully composed letter listing my incomes ?

jem16

21Twinkle wrote: »

but the on-line calculator has worked out that I owe HMRC almost £300 - which, when I produced a "yourfullcalculation.pdf" clearly shows that they are working on GROSS tax when I put down the NET figure

That's what's meant to happen and does on my calculation as well. However look further down the calculation at the section marked "Total income on which tax has been charged". Under that it says "Income Tax charged" and lists various parts. Under that it says "Minus tax deducted" - I have a deduction for interest received from UK banks and building societies. It's directly underneath the section "From all employments".

if you do not have this section, you are entering your interest in the wrong place on the tax form.