Help working out whats my salary for tax credits

Toffeecrisp10

I thought this would be so easy!!!

I've submitted my child tax credit form by following what they've told me to do which was my gross salary from my p60.

However I'm really confused if I've given the correct figure because of schemes my company run.

My pay slip looks like this
Basic pay x amount
Holiday pay y amount
Pension z amount
Gross pay is x-y-z= a

The holiday pay is a scheme the company run whereby you can buy annual leave. Therefore I buy 5 days annual leave and pay it back at y amount per month.

Then I have a part on my payslip called deductions, on here it shows
Paye b amount
NIA c amount
SIP d amount. (Share incentive )
Total deductions =e
Therefore my net salary is the gross pay(a) minus total deductions(e)


So I'm completely lost now. My p60 gives the total of my gross salary which is what I've put on my tax form. However online I've read that because I pay into a Sip scheme I have to add that amount onto my gross amount and put the total of both on my tax credits. Also because I buy leave which is deducted from my gross salary I also have to add that back in???

I'm sorry I'm so confused. I've rung the helpline but they didn't seem to know.

My original thought is that as I'm buying annual leave it's the same as me requesting unpaid leave from work and if I did that my salary would be reduced and therefore I'm right to keep my gross salary as it is, but who knows. I'm lost!!

Then the other question is as my Sip has matured it means each month I get back via shares, what I paid into the scheme plus shares the company give me. So do I need to include what they give me as a extra earning?

Thanks in advance, sorry for the mass of questions

zagfles

Toffeecrisp10 wrote: »

I thought this would be so easy!!!

I've submitted my child tax credit form by following what they've told me to do which was my gross salary from my p60.

However I'm really confused if I've given the correct figure because of schemes my company run.

My pay slip looks like this
Basic pay x amount
Holiday pay y amount
Pension z amount
Gross pay is x-y-z= a

The holiday pay is a scheme the company run whereby you can buy annual leave. Therefore I buy 5 days annual leave and pay it back at y amount per month.

Then I have a part on my payslip called deductions, on here it shows
Paye b amount
NIA c amount
SIP d amount. (Share incentive )
Total deductions =e
Therefore my net salary is the gross pay(a) minus total deductions(e)


So I'm completely lost now. My p60 gives the total of my gross salary which is what I've put on my tax form. However online I've read that because I pay into a Sip scheme I have to add that amount onto my gross amount and put the total of both on my tax credits. Also because I buy leave which is deducted from my gross salary I also have to add that back in???

I'm sorry I'm so confused. I've rung the helpline but they didn't seem to know.

My original thought is that as I'm buying annual leave it's the same as me requesting unpaid leave from work and if I did that my salary would be reduced and therefore I'm right to keep my gross salary as it is, but who knows. I'm lost!!

Then the other question is as my Sip has matured it means each month I get back via shares, what I paid into the scheme plus shares the company give me. So do I need to include what they give me as a extra earning?

Thanks in advance, sorry for the mass of questions

Is the SIP taxable? It looks like the tax credits treatment of share options is the same as the tax treatment, see http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04100.htm & http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04118.htm if you can make any sense of them!

Re the holiday salary sacrifice, you don't need to add that back on, it's one of the salary sacrifices they allow see http://www.hmrc.gov.uk/manuals/tcmanual/TCM0044060.htm (the list in step 3 is the list of things they'll allow as sal sac without investigation).

Toffeecrisp10

From what I can see the sip is non taxable. However as the figure I've given the tax credits is my gross salary that was the figure before the sip was deducted. So if I add it back on aren't I over inflating my gross salary?

Sorry again.
The other thing.
My sip is now maturing so each month I'm accruing the shares I've bought plus the shares work have matched. I'm guessing I have to now count the matching shares as an additional income. But the shares are held in a holding period for 5 yrs so that they become tax free.
Do I work out what the value of the matching shares are that are now tax free or the value of the matching shares that I could now claim but would pay tax on?

zagfles

Toffeecrisp10 wrote: »

From what I can see the sip is non taxable. However as the figure I've given the tax credits is my gross salary that was the figure before the sip was deducted. So if I add it back on aren't I over inflating my gross salary?

If it's coming out of your net pay then your gross/taxable pay isn't being reduced by them so no you wouldn't add them on, that would be counting the same money twice!

Sorry again.
The other thing.
My sip is now maturing so each month I'm accruing the shares I've bought plus the shares work have matched. I'm guessing I have to now count the matching shares as an additional income. But the shares are held in a holding period for 5 yrs so that they become tax free.
Do I work out what the value of the matching shares are that are now tax free or the value of the matching shares that I could now claim but would pay tax on?

My understanding is the tax credits treatment is the same as the tax treatment. You're not paying tax on them now are you? If not I wouldn't have thought you'd need to declare them for tax credits. You're probably best writing to them with details just to make sure (don't bother phoning as the advice you get on the phone is often unreliable, you're much more likely to get the correct answer in writing).

Toffeecrisp10

Thanks. I've written them a letter and included copies of my p60 and payslip. I've asked them to explain to me what figure I should be giving them based on that information. I'm going to send it recorded delivery.