I don't pay tax - ISA?

le_loup

My word, you're on form today.
Shame you didn't give any help to the OP though!

BobQ

givememoney wrote: »

Bearing in mind I don't now pay tax as I am retired, is there any point in relying on ISA accounts.

Is it possible to open an account stating you do not want tax deducted,I'm guessing it is.

Just to add a point. In an era where we are always switching accounts to get better interest its worth bearing in mind that the R85 applies to a single account. Do not assume that if you transfer savings to another account (even with the same firm) your R85 still applies. It does not. New form required.....

CLAPTON

mania112 wrote: »

Some people like to let other people know when they've said something not word-for-word perfect, even when they fully understood the meaning.

Those people tend to lack common sense, friends and a job which involves being face-to-face with customers.

When you have been around the boards a little longer and have developed more appropriate social skills, you will find there are many posters who do indeed have all sorts of incorrect understanding about tax and financial issues.

These misunderstanding extend to thinking that young people (under 16s), students and/or pensioners don't pay tax; they worry that they will pay 40% tax because they earn over 35,000, they don't understand about the 30 day rule for cgt, aren't aware of transferrable IHT allowances, aren't aware of the 10% tax saving band etc etc.

I gave the OP clear correct information without any value judgement being made on the question.

There was no need for you to make assumption about what I 'knew' about the poster's knowledge or about my intend.

jackyann

givememoney wrote: »

Bearing in mind I don't now pay tax as I am retired, is there any point in relying on ISA accounts.

Being rather nit-picky: it is the "as" that is confusing.
"I do not pay tax as my income is below the tax threshold" would have made it clear.
This was initially pointed out reasonably; and it is relevant. Loads of people on this forum are confused about technicalities eg: what a "trust" is, children's legal rights, meaning of wills etc.etc. When dealing with money, tax & legal matters as this site does, technicalities matter. I have certainly heard "you don't pay tax now you're retired" (whether people think that is because tax isn't deducted from State Pension, or are confused about NI, I don't know)

Some may have thought it was clear, others didn't - and no need to be unkind to either or OP (I sometimes click the thanks button and sometimes post a general thanks, it just depends)

BobQ

jackyann wrote: »

Being rather nit-picky: it is the "as" that is confusing.
"I do not pay tax as my income is below the tax threshold" would have made it clear.
This was initially pointed out reasonably; and it is relevant. Loads of people on this forum are confused about technicalities eg: what a "trust" is, children's legal rights, meaning of wills etc.etc. When dealing with money, tax & legal matters as this site does, technicalities matter. I have certainly heard "you don't pay tax now you're retired" (whether people think that is because tax isn't deducted from State Pension, or are confused about NI, I don't know)

Some may have thought it was clear, others didn't - and no need to be unkind to either or OP (I sometimes click the thanks button and sometimes post a general thanks, it just depends)

I though it was quite clear. All this pedantry is so unnecessary in my view.

CLAPTON

BobQ wrote: »

I though it was quite clear. All this pedantry is so unnecessary in my view.

Just for one moment consider the possibility that some-one might actually think that pensioners don't pay tax (they don't after all pay NI).
And some-one asked that very same question and people just gave the info about R85s not wanting to offend a sensitive soul.

Then in a few years HMRC came knocking demanding the back tax and a fine for not declaring the income.

who would have been disadvantaged most?

-the current OP who was give info that he didn't want/need?
or
-the poor guy that had to pay tax back with a fine.

mania112

CLAPTON wrote: »

retired people do pay tax just like anyone else

Looking back, and now we're 'fine-tooth-combing' it's quite ironic that this comment is factually incorrect because retired people and the employed do not pay tax because :-

a) it's taken care of under the PAYE system.
b) the first £x is tax-free under the personal allowance rules.

Only the self-employed are liable for their own tax returns (and those with rental property and/or some types of investments).

Point is, I hope you can read this comment on its own and see how it is clearly a pedantic comment, or one which could be taken as such.

CLAPTON

mania112 wrote: »

Looking back, and now we're 'fine-tooth-combing' it's quite ironic that this comment is factually incorrect because retired people and the employed do not pay tax because :-

a) it's taken care of under the PAYE system.
b) the first £x is tax-free under the personal allowance rules.

Only the self-employed are liable for their own tax returns (and those with rental property and/or some types of investments).

Point is, I hope you can read this comment on its own and see how it is clearly a pedantic comment, or one which could be taken as such.

retired people pay tax like everyone else

i.e. that same rules apply even if that means in some situations the tax is zero.
There is a clear difference between being exempt (e.g. interest in an ISA) and having no tax to actually pay because earnings are low.

Also your understanding of the liability to make tax returns is incorrect but I will assume that you 'really' know what you mean even if it isn't what you wrote.

System

A reason for having an ISA even if a non-taxpayer might be because someone has a likelihood of becoming a tax-payer at a future date. All the accumulated ISA money would then be in a tax-free environment.

The words "as I am now retired" would then be relevant because that possibility might be unlikely in the OP's case.

mania112

CLAPTON wrote: »

retired people pay tax like everyone else

i.e. that same rules apply even if that means in some situations the tax is zero.
There is a clear difference between being exempt (e.g. interest in an ISA) and having no tax to actually pay because earnings are low.

Which is exactly what you should have said initially.