Tax help please

HappyMedium_2

Having not done any paid work for several years but lots of voluntary work I find I now have a problem to sort out. Turned 60 and got my state pension this month and was also elected as a District Councillor at the beginning of the month, so suddenly an income. Total income per year around £10,000 The Council are paying me a retainer and the first pay slip came this morning with £68 tax taken off at basic rate.

I want to go for self assessment so I can claim allowances for running my office, computer, travel etc. else I will be paying around £60 per month tax according to my calculations. Can someone tell me what is the best thing for me to do.

tigtag02

Are you in receipt of a state pension?

If so then your tax allowence will be being used there and that is why your code is BR on your income.

Not sure about SE I'm afraid but someone will be along soon I'm sure

jem16

HappyMedium wrote: »

Having not done any paid work for several years but lots of voluntary work I find I now have a problem to sort out. Turned 60 and got my state pension this month and was also elected as a District Councillor at the beginning of the month, so suddenly an income. Total income per year around £10,000 The Council are paying me a retainer and the first pay slip came this morning with £68 tax taken off at basic rate.

I want to go for self assessment so I can claim allowances for running my office, computer, travel etc. else I will be paying around £60 per month tax according to my calculations. Can someone tell me what is the best thing for me to do.

Your best bet would be to phone HMRC and talk over the situation with them. Whether you will be able to do SA or just need to have allowances added to your tax code, they would be able to advise.

tigtag02 wrote:

Are you in receipt of a state pension?

If so then your tax allowence will be being used there and that is why your code is BR on your income.

The state pension, although taxable, does not have a tax code applied to it as it is paid gross. If you have a state pension and another income from another source, then your tax code will be worked out as the basic personal allowance minus the state pension. At age 60 this would be 5225 minus around 4835 for the state pension. This would leave 390 so the tax code would be 39L and would be applied by the council.

When you started work with the council did you fill in a P46? On this form you should tick the box - I am in receipt of a state pension. That form will allow HMRC to issue a proper tax code. The BR code is being used as you haven't yet got a tax code although it really should be the emergency code of 522L, Wk/M1. However to be honest, the BR code is going to be closer to the amount of tax you should be paying.

HappyMedium_2

Thank you for your responses , I have sent a letter to the Tax Office. I feel I should be able to claim allowances for having an office in my home and telephone. printing and postage of letters etc to constituents concerning their problems which they ask me to help with. Perhaps someone can tell me if this is correct or not.

HappyMedium_2

Have not filled in a P60 yet as I have not been sent one.

jem16

It does look like you will be able to claim allowances.

http://www.hmrc.gov.uk/manuals/eimanual/EIM65955.htm

Why don't you phone your nearest HMRC enquiry office? They will be able to sort it out quite quickly for you.

jem16

HappyMedium wrote: »

Have not filled in a P60 yet as I have not been sent one.

It's not a P60 you need, it's a P46. A P60 is issued to show income and tax paid for the last tax year so you won't get one of those until next May.

What you need is a P46 and you ask the council for that as they are employing you. This is what you complete when you start a new job and don't have a P45 from a previous job.


http://www.hmrc.gov.uk/forms/p46.pdf

HappyMedium_2

Thanks Jem, incidentally my initials are also JEM.

I have downloaded the P46 and will send it off to the Council to complete their bit. I now feel I have a bit clearer idea of what I can claim and will add to my letter to the Tax Office a breakdown of what I feel is responsible to claim in allowances.

TrikerAndBiker

The council will leave you on basic rate tax as this is the correct coding if you tick box C on the P46. Once the tax office receive the P46 from the council then they will issue your correct code and you should receive a small refund via your pay for any overpayment you may have made.

tigtag02

TrikerAndBiker wrote: »

The council will leave you on basic rate tax as this is the correct coding if you tick box C on the P46. Once the tax office receive the P46 from the council then they will issue your correct code and you should receive a small refund via your pay for any overpayment you may have made.

Thanks for that T&B - it seemed to be implied earlier up that what I was saying was wrong!!

Maybe I just idnt word it right

jem16

tigtag02 wrote: »

Thanks for that T&B - it seemed to be implied earlier up that what I was saying was wrong!!

Maybe I just idnt word it right

BR will be used but only temporarily until HMRC issue the correct code. If the OP does not fill in a P46 this would take much longer which was what I was trying to point out.

You seemed to be suggesting that a tax code would be applied to the state pension and BR would be applied to the council earnings, i.e. two separate codes.

My apologies if this is not what you meant.