Quick SA questions

jamiewakeham

Hi all

Just dealing with my 16-17 SA return, and I've a couple of questions that I suspect might get answered a heck of a lot quicker here than calling HMRC!

I'm a self-employed basic rate taxpayer. For the first time this year I have interest from some p2p investments. It adds up to (much) less than the £1000 allowance. Do I simply put the total interest into the box for 'untaxed UK interest' and let HMRC work out that it's not to be taxed?

I also made a loss of a couple of hundred pounds by (rather stupidly) playing with Plus500. If I had made money here I presume I would have needed to declare it as income; is there a mechanism for me to set off the loss and reduce my tax bill?

And, finally: my wife is employed, on PAYE, and also made a small amount of interest on our p2p investments. She doesn't fill in a return. As the interest is below her personal allowance, do we need to tell HMRC at all? I'd rather not have to do a return for her as well if I can avoid it!

Cheers
Jamie

Dazed_and_confused

Yes, along with any interest from other sources such as the usual MSE suspects, Santander, Nationwide, Lloyd's etc.

Don't forget you need to know total income, including the interest to know whether it's (upto) £1000 or £500 which will be taxed at the new rate of 0% (unlikely to affect you but this is going to be a shock for some Child Benefit claimants who might still think some interest is now "tax free").

Never heard of Plus500 sorry.

For your wife do you mean below her personal allowance or personal savings allowance? Roughly how much is her PAYE income before any tax?

jamiewakeham

Thanks. We're not Child Benefit claimants, and the interest won't take me near the basic taxpayer ceiling (I'm several thousand away from it, and it's barely £100 interest this year). I will keep an eye out for it taking me over the ceiling in future years though.

Plus500 is one of those online trading platforms. Essentially I put £500 into it, thinking I knew which way the value of bitcoin was going. I was wrong(!), and when I closed the account I only had £200 to withdraw. I'm wondering if I can claim some sort of relief on the lost £300.

As for my wife: I meant Personal Savings Allowance. She earns £42k before tax, and again it's only about £100 in interest. I'm hoping that, as this is below her £1000 PSA, we don't need to fill out a return for her.

Thanks for your help!

TheCyclingProgrammer

Your wife will not need to do a tax return. Even if the £100 was taxable you'd be able to notify HMRC over the phone and they'd adjust her tax code to collect it.

Dazed_and_confused

Agree no need for your wife to do a return or notify HMRC in this situation but the £100 is taxable, just the tax rate it would be taxed at is 0%.

00ec25

Plus 500 comes up as a contracts for difference trading platform?

if that is the one you mean then CFD are subject to Capital Gains Tax not income tax. As you are already required to complete a SA return you must also complete the CGT pages on it and declare your profit/loss from the CFDs. If you have an overall loss then all you can do with it is declare now so it can be carried forward to offset against any future capital gains you may make.

http://moneyterms.co.uk/cfd/cfd-tax/

jamiewakeham

Yes, that's the one. My confusion comes from the fact that I hadn't recognised it as being subject to CGT. I will simply have to roll this onwards until I make some other taxable capital gain. I have no idea of when that might be, but I can just roll this loss foward every year, right?

re my wife, on checking it turns out she earns £46 so she is a higher rate taxpayer. I assume that means everything above stands except that her PSA is £500, not £1000, and so as long as her interest on her p2p investment remains below £500 we need take no action.

Thanks for your help, all!

Dazed_and_confused

Still no need to do anything regarding the interest but if wife has made gift aid payments or contributed to a personal pension/sipp she could be due some higher rate tax relief.

If she needs to contact HMRC to claim the extra tax relief then she may as well notify them of the interest so she's got everything as up to date as possible.

jamiewakeham

Thanks again for your help. I realise I am coming across as a bit under-informed here!

My wife does indeed make a contribution to an FSAVC, and looking at the paperwork her payment of £26.67 gets magically uplifted to £33.33 every month. That's the tax relief at 20% being added, isn't it? So I figured she must be due the additional relief on this, and was preparing to get her to call HMRC to deal with it.

But: having said she is a higher rate taxpayer, I've just looked at her P60s for the last few years. Her gross pay is £46,700, but her taxable income is listed as £43000 - it's taken me a little while to work out that this is her gross pay minus her occupational pension contributions.

So if her taxable income is actually £43k, does that mean she is not a higher rate taxpayer after all? And that means she is not entitled to higher rate relief on her FSAVC conts, but also means she has a personal savings allowance of £1000 and not £500?

Dazed_and_confused

Yes, looks like the basic rate relief as you say.

£43k is this year higher rate limit in Scotland, £45k rest of the UK and £43k was last years figure everywhere. It had fluctuated in recent years so she could be borderline.

You need to look at the overall position to know the PSA amount. You might find it simplest to stick wife's details into your self assessment return and check the overall result (then discard it!).

But the basic principle is the pension contributions increase the amount you can pay basic rate tax on so if her total income, including savings interest, is within her extended basic rate limit then yes she would get PSA upto £1000.

jamiewakeham

Understood perfectly. Thanks!