claiming back tax when travelling

iainmay123

hi

I am just after a validation of my thinking here.

I am currently saving like a lunatic to go travelling next year, hopefully around October. The exact date depends on when it will be most efficient for me to leave from a tax perspective.

As a higher rate tax payer, am I right in thinking that if I leave when my ytd earnings are almost 45k that this is the "best" time to leave? I will be out of the UK for around 18 months and not drawing any kind of income (bar interest at around 1k pa). Am I right in thinking that I can claim back the overpaid tax at the higher rate, that I will have paid through PAYE?

Thanks

Iain

antrobus

iainmay123 wrote: »

... Am I right in thinking that I can claim back the overpaid tax at the higher rate, that I will have paid through PAYE?...

Yes.

P.S. Higher rate starts at £43k. Your personal allowance is £11k.

43+11=54

Darksparkle

antrobus wrote: »

Yes.

P.S. Higher rate starts at £43k. Your personal allowance is £11k.

43+11=54

Higher rate starts at £43,000. This already includes the personal allowance.

https://www.gov.uk/income-tax-rates/current-rates-and-allowances

Dazed_and_confused

The common perception on mse is that hrtax starts at 43k this year because you get 11k tax free and 32k at basic/20% rate.

What does 54k refer to?

iainmay123

I thought the 43/45 included the personal allowance?

iainmay123

Proposed revisions
Legislation will be introduced in Finance Bill 2016 to set the personal allowance for 2017 to 2018 at £11,500, and the basic rate limit for 2017 to 2018 at £33,500.

The table below sets out the thresholds from 2016 to 2017 to include the changes from this measure.

2016 to 2017 2017 to 2018
Personal allowance (PA) 11,000 11,500
Basic Rate Limit (BRL) 32,000 33,500
Higher Rate Threholds (HRT) 43,000 45,000

Dazed_and_confused

iainmay123 wrote: »

Proposed revisions
Legislation will be introduced in Finance Bill 2016 to set the personal allowance for 2017 to 2018 at £11,500, and the basic rate limit for 2017 to 2018 at £33,500.

The table below sets out the thresholds from 2016 to 2017 to include the changes from this measure.

2016 to 2017 2017 to 2018
Personal allowance (PA) 11,000 11,500
Basic Rate Limit (BRL) 32,000 33,500
Higher Rate Threholds (HRT) 43,000 45,000

Yes so it looks like 43k is the crucial figure here not 54k.

Another thing which could make a big difference to you this year is the new personal savings allowance. You will have to factor in ALL of your interest received first and this will determine if you are a basic or higher ratw payer. If you are basic rate you get 1000 interest taxed at 0% (PSA) but if higher rate it's just 500 at 0%. Just going £1 into higher rate could make a big difference in the amount of tax to pay on your savings interest

iainmay123

Dazed_and_confused wrote: »

Yes so it looks like 43k is the crucial figure here not 54k.

Another thing which could make a big difference to you this year is the new personal savings allowance. You will have to factor in ALL of your interest received first and this will determine if you are a basic or higher ratw payer. If you are basic rate you get 1000 interest taxed at 0% (PSA) but if higher rate it's just 500 at 0%. Just going £1 into higher rate could make a big difference in the amount of tax to pay on your savings interest

Yeah big time. I haven't quite worked out how to deal with that, other than stuffing some of it into an isa. Might have to entrust some of it to the other half who is a lower rate taxpayer.

I was also wondering about NiC. Can this be claimed back in a similar way to income tax? The brackets for UEL are the same I think...

Darksparkle

iainmay123 wrote: »

Yeah big time. I haven't quite worked out how to deal with that, other than stuffing some of it into an isa. Might have to entrust some of it to the other half who is a lower rate taxpayer.

I was also wondering about NiC. Can this be claimed back in a similar way to income tax? The brackets for UEL are the same I think...

NIC is looked at each pay period rather than annually like tax so unlikely to be due a refund unless it's been calculated wrong.

iainmay123

Darksparkle wrote: »

NIC is looked at each pay period rather than annually like tax so unlikely to be due a refund unless it's been calculated wrong.

Thanks for clearing that up.