Self Assessment Query

piratematt

Hi,

I'm trying to work out which year I need to pay tax on self assessment. I've never had to self assess before.

From April 2014 to December 2014
I started that tax year on a salary of £40,800
And by December 2014 I was earning £43,900 due to promotions
£0 income from savings in my name (or indeed my wife)

December 2014 to June 2015
I changed jobs and I earned £58,000
Start to earn interest on savings

June 2015 to date
I now earn £60,000
~£25p/m interest from savings (in my name)

My wife claims child benefit.
I know we have to pay that back in full if I earn £60,000 or more in a given tax year

By April 2015, in total for April 2014-April 2015 I actually earned quite a bit under the 50k bracket averaged out. (pension, £254 child care vouchers p/m)
We also had absolutely no savings interest. So there was no tax to pay on any other income.

This time around by April 2016 I will have earned a pretty good proportion of £60,000

But let's call it £55,000 after my pension deductions, and child care voucher (£124 a month)

I will also have earned about £250 in interest as I'm saving quite a bit of money in various bank accounts in my name. Of course they are 20% deducted at source. But I'm aware I will need to pay an additional 20% now.

The reason for not increasing pension payments to simplify the whole process by reducing my salary to below £50k this year by the way is two fold:

1. I'm building up a safety buffer in savings should I ever lose my job.
2. And then between my wife and I, we plan to pay an additional £2,000 a month off from a NRAM together mortgage which has crippled us (we are fortunate that we've always been able to pay, but we are paying for a mistake we made in our mid 20s due to poor advice from a mortgage advisor and our eagerness to move in together) for last 10 years and the whole reason for me to chase high salaries as quick as possible. This will save us far more than we could ever recoup in short term pension boosts. I can clear the 'together' part of the mortgage within two years now

Once the unsecured element of NRAM is paid and I switch our mortgage to a sensible provider free from the shackles of NRAMs 12% default if we leave them now, I will change my focus back to my pension.


My question - and this is where I'm slightly confused:
Do I need to register to pay additional tax on my savings, and pay back the child benefit received 2015 to April 2016 this year?
Even though I won't know how much interest I will get from bank accounts until after the payment deadline, or indeed the exact details of my PAYE details until April 2016.

Or do I only have to register to pay tax back for this year - a whole year from now (register oct 2016, pay by Jan 2017) - when this years earnings will be in the past?

piratematt

I'm fairly confident that I will only have register October next year (2016). And pay my first tax bill in Jan 2017.
Paying back anything on my interest and a significant proportion of this years child benefit. I won't quite be at £60k gross taxable; but I will certainly be over £55k

But I would really appreciate if someone could back this reasoned assumption up.
I guess it's it the child benefit which makes me doubt the most.

If I've misunderstood and I need to pay a proportion of that back this year; I will need to act pretty quickly now to avoid fines!

Savvy_Sue

TBH, I'm not sure anyone can answer your question (easily) as it stands.

Could you give us the figures from your P60s for the last two years, and confirm that these include earnings from all employments when you changed job mid tax-year?