2015/16 Tax Year no tax due if less than £15,600 income including Savings income.

Fortescue

My income is within the limits of the 2015/16 R85 scheme.

Up until now I have completed an R40 to reclaim tax overpaid. I have several interest bearing current accounts, one of which has just paid the first interest of the FY, and I have a number of bonds which mature in November and December.

Is it permissible to submit an R85 for an account which has already started to pay interest with tax deducted?
I realise that I have to move all accounts to an R85 basis and wouldn't want to end up with one that I couldn't convert to 'interest paid gross' status.

Any information and/or advice will gratefully received.

Thank you.

Yorkshire_Pud

Fortescue wrote: »

My income is within the limits of the 2015/16 R85 scheme.

Up until now I have completed an R40 to reclaim tax overpaid. I have several interest bearing current accounts, one of which has just paid the first interest of the FY, and I have a number of bonds which mature in November and December.

Is it permissible to submit an R85 for an account which has already started to pay interest with tax deducted?
I realise that I have to move all accounts to an R85 basis and wouldn't want to end up with one that I couldn't convert to 'interest paid gross' status.

Any information and/or advice will gratefully received.

Thank you.

I think the answer is yes and going by the R85 thread on here those who jumped the gun and changed to gross interest before this tax year started found that with Santander at least all their interest was back paid up to the gross level for the 14/15 tax year!

So it looks like you both get a refund within the tax year from the bank if you've been paid at the net rate before registering for Gross interest and if the bank stuffs it up you get more chances to register within this tax year until they get it right! Or am I dreaming!?:)

buglawton

I'd be interested to confirm
a) you have £15,000 pa in interest from savings - no tax, that's clear.
b) you have £15,000 in buy-to-let income. Now you have to pay 10% national insurance on the income over £8,000.

Is (b) true or false? There are threads running on this topic on the specialist landlord forums but no one can point to an HMRC web page that confirms or denies it.

Nationwide8

Hmmm here's one for you,I will be taking early retirement end of June,I know my salary for 3 mth s,April,May,June and my occupational pension for 9 months and my savings interest for 2015-2016 will not add up to more than £15,600....so can I fill in R85 forms now for every account I have ??

sparkiemalarkie

I phoned


BOS (including HALIFAX),TSB and LLOYDS and I registered my R85 over the phone.
I registered online for Santander
The only form I had to send in was for First Direct.
I haven't tried Yorkshire Bank yet.....


hth


sparkie

Nationwide8

Just tried to this for all my accounts,all can do over the phone except YB,M&S,and FD,have to fill in a R85 and either post or call in a branch with it.

TCA

buglawton wrote: »

b) you have £15,000 in buy-to-let income. Now you have to pay 10% national insurance on the income over £8,000.

Is (b) true or false? There are threads running on this topic on the specialist landlord forums but no one can point to an HMRC web page that confirms or denies it.

If you're self-employed in 2015/16 and your taxable profits are £15,000 (and you have no other income), you'd pay 20% tax on £4,400 i.e. after the personal allowance of £10,600 is deducted.

Plus, as you said, Class 4 NI is payable at 9% on profits between £8,060 and £42,385 in addition to Class 2 NI of £2.80 per week. Other than the rates, this is as it was before.

Where it would change is if the person in the situation above also had bank interest of up to £600. Under the new rules, he/she would be able to receive this without paying tax on it.

buglawton

So "no tax due if less than £15,600 income" only applies if ALL your income is shared dividend or savings interest, then.

And whether owning buy-to-lets is "self employed" remains a grey area.

TCA

buglawton wrote: »

So "no tax due if less than £15,600 income" only applies if ALL your income is shared dividend or savings interest, then.

And whether owning buy-to-lets is "self employed" remains a grey area.

It's to do with personal taxable income, which includes savings interest and earnings. If buy-to-let income is received by a person in the form of salary via a company set-up, then the income received by that individual is taxable income. If there's no company set-up, then that individual should be declaring the income as self-employed via self-assessment returns.

I don't see any grey area unless you're referring to a company set-up whereby the owner takes his property income in the form of dividends? Are you questioning whether dividends would form part of the £15,600 number?

buglawton

Would dividends form part of income? See 1st paragraph above.

Is it a grey area when it comes to paying 10% NI on income if rental income exceeds £8000 pa? Insofar that HMRC refuses to publish a clear statement, yes.