Self assessment: foreign income?

dc2447

I have never done as self assessment but recently got a request to complete one.

My finances are reasonably mundane however I do get Restricted Stock (RSUs) as part of my job.

These are taxed at Vest time, about half are sold to cover the taxes.

This all happens in the states, via a website called etrade - I have filled out WBEN forms

When I fill out my online return I am told I need to make a 12k payment (gulp) by end of January.

My feeling is that my p60 includes the income from the Restricted Stock but not the tax.

Does that make sense?

pjclar02

Hi there

Typically, the stock value would be included on your payslip and tax deducted at source. Therefore, if you have a £12k liability it suggests that tax was withheld at too low a rate - maybe held at 20% when you are a 45% taxpayer?

Are you able to post up more information in terms of the figures involved?

jamesd

Normally what will happen in a properly set up scheme that is not covered by the UK tax exemptions is that the proceeds from the sale are include in payroll as an increase in taxable income for the month of the transaction. Income tax will then be taken in your normal pay, paid for by the deduction from the proceeds of the sale. Any extra would be paid back to you in payroll and any extra required just taken as a higher deduction from pay. Since it's handled in PAYE it'll usually be accurate for income tax.

Best thing to do initially is to ask your stock scheme administrators how it's handled in payroll and check your payslips and P60 to verify that the whole proceeds were reported as PAYE income.

It's entirely possible that you're just wrongly reporting this on the tax return and that correct treatment is to include the full proceeds of the sale as part of your taxable income reported in the P60, with nothing more to declare.

dc2447

pjclar02 wrote: »

Hi there

Typically, the stock value would be included on your payslip and tax deducted at source. Therefore, if you have a £12k liability it suggests that tax was withheld at too low a rate - maybe held at 20% when you are a 45% taxpayer?

Are you able to post up more information in terms of the figures involved?

Hi - you are indeed correct. I confirmed with payroll that tax for the shares was indued taxed at source. I removed my foreign earnings section and recalculated and I now have a 4k liability

The issue seems to be that I am on a 810L tax code as a higher rate tax player.

I am somewhat surprised that I owe 4k.

In terms of figures, I am not super comfortable posting then on the internet

dc2447

Quick update - I am now on OT Culmalative tax code

pjclar02

dc2447 wrote: »

In terms of figures, I am not super comfortable posting then on the internet

If you want to send me a PM or an email through my website I am happy to run a quick check for you if you think the tax owing is incorrect.

jamesd

A higher rate tax payer still gets a normal personal allowance. If the whole value was included in payroll there shouldn't be any tax due.

To do more checking probably needs:

1. Total value of shares at time of vesting.
2. Value of shares sold after that.
3. Value of any deductions from the sale proceeds.
4. Payslip numbers for the payroll month that included the transaction. At least the taxable income compared to normal month taxable income to allow checking that the whole amount sold was included as PAYE income.

Accepting pjclar02's offer seems like a good idea.

dc2447

pjclar02 wrote: »

If you want to send me a PM or an email through my website I am happy to run a quick check for you if you think the tax owing is incorrect.

Thanks PM sent