Banks and the HMRC

ceredigion

Until the banks request my UTR, I can't how HMRC can be certain of anything.

gt94sss2

isasmurf wrote: »

I thought making tax digital was about abolishing self assessment, not pre-populating it.

It's about abolishing the paper self assessment form with HMRC populating what they can online - though you will need to check the figures.

Also, depending on the type of tax payer you are, their current plans suggest that you will need to review it 5 times/tax year rather than just filling it in once as at present.

agrinnall

ceredigion wrote: »

Until the banks request my UTR, I can't how HMRC can be certain of anything.

Don't the banks know your NINO?

And of course, if HMRC were certain of everything there would be no need to complete returns at all because you'd always be paying the right tax.

fox_warrior

Firstly, thanks to all for the very enlightening posts. I was hoping the thread would develop along the lines that it has. There is a lot more behind my simple first post and it could take ages to go through everything I'm interested in. I always thought that HMRC probably knows more about "my" tax affairs than I do via PAYE, Banks, Building Societies, etc. Now I'm certain.

I'm coming up 65, spent all my working life as an employee, so all my tax was PAYE. I took VR a few years ago and invested my lump sum and savings in Bonds. Interest rates are now abysmal and I'm looking for a better return. I'm considering buying a property so that I can rent it out. (Trust me to think about it after the new Stamp Duty rules). It's not my hearts desire to become a Landlord, far from it but it makes financial sense. I've been looking on-line at the HMRC web site to glean what information I can about the matter, in particular, self assessment tax returns. It would be in my wife's name as she is a non tax payer but in reality it would be me doing everything. Having looked at the web site my "head's a shed", if you get what I mean. There are so many things that, (At the moment), I know little or nothing about and reading it makes the prospect seem daunting.

I'm interested to know how much an Accountant might charge to do tax returns if I shy away from it.

It !!!!es me off that my wife and I have gone through the high interest rates of the late 70s & early 80s, worried are selves sick that I could be made redundant as was often happening with the company I worked for. I worked every hour I could physically manage to earn enough money to make capital payments off my mortgage so that if I was made redundant we and our children would at least have a roof over our heads. During all this we both had in mind that my wife would get her State Pension at 60, (2 yrs ago) and this would help our finances until I got mine at 65, Ha bloomin Ha, they changed the rules and now she won't get it until she is 66. (At least I'm on track to get mine at 65). The government has been banging on about how we should all save for our retirement to ease the financial burden and when you do, they start declaring how we now have a wealthy load of OAPs and we may get penalized for it in the future.

Now, at our time of life, after all the hard work to make ourselves financially sound, we find ourselves being faced with the prospect of becoming Landlords and all the responsibility and burden that comes with that, to keep our savings from depreciating as they are now, rather than just simply enjoying our retirement.

theburningcat

fox_warrior wrote: »

Firstly, thanks to all for the very enlightening posts. I was hoping the thread would develop along the lines that it has. There is a lot more behind my simple first post and it could take ages to go through everything I'm interested in. I always thought that HMRC probably knows more about "my" tax affairs than I do via PAYE, Banks, Building Societies, etc. Now I'm certain.

I'm coming up 65, spent all my working life as an employee, so all my tax was PAYE. I took VR a few years ago and invested my lump sum and savings in Bonds. Interest rates are now abysmal and I'm looking for a better return. I'm considering buying a property so that I can rent it out. (Trust me to think about it after the new Stamp Duty rules). It's not my hearts desire to become a Landlord, far from it but it makes financial sense. I've been looking on-line at the HMRC web site to glean what information I can about the matter, in particular, self assessment tax returns. It would be in my wife's name as she is a non tax payer but in reality it would be me doing everything. Having looked at the web site my "head's a shed", if you get what I mean. There are so many things that, (At the moment), I know little or nothing about and reading it makes the prospect seem daunting.

I'm interested to know how much an Accountant might charge to do tax returns if I shy away from it.

It !!!!es me off that my wife and I have gone through the high interest rates of the late 70s & early 80s, worried are selves sick that I could be made redundant as was often happening with the company I worked for. I worked every hour I could physically manage to earn enough money to make capital payments off my mortgage so that if I was made redundant we and our children would at least have a roof over our heads. During all this we both had in mind that my wife would get her State Pension at 60, (2 yrs ago) and this would help our finances until I got mine at 65, Ha bloomin Ha, they changed the rules and now she won't get it until she is 66. (At least I'm on track to get mine at 65). The government has been banging on about how we should all save for our retirement to ease the financial burden and when you do, they start declaring how we now have a wealthy load of OAPs and we may get penalized for it in the future.

Now, at our time of life, after all the hard work to make ourselves financially sound, we find ourselves being faced with the prospect of becoming Landlords and all the responsibility and burden that comes with that, to keep our savings from depreciating as they are now, rather than just simply enjoying our retirement.

That depends on how complicated your situation is - how many sources of income, whether you have all of the paperwork read for them etc. A starting point for a Self Assessment is something like £150.

fox_warrior

theburningcat wrote: »

That depends on how complicated your situation is - how many sources of income, whether you have all of the paperwork read for them etc. A starting point for a Self Assessment is something like £150.

Not too complicated. Apart from interest on savings and bank accounts, the money from rent would be the only income until my wife gets her pension in four years time. Even then her total income would be lower than her personal tax allowance so she still wouldn't be liable to pay any tax. I could see the possibility of becoming Landlords a while ago so I've been keeping the annual summary records from our bank and savings accounts for tax purposes in case we ever need them.

bigadaj

fox_warrior wrote: »

Firstly, thanks to all for the very enlightening posts. I was hoping the thread would develop along the lines that it has. There is a lot more behind my simple first post and it could take ages to go through everything I'm interested in. I always thought that HMRC probably knows more about "my" tax affairs than I do via PAYE, Banks, Building Societies, etc. Now I'm certain.

I'm coming up 65, spent all my working life as an employee, so all my tax was PAYE. I took VR a few years ago and invested my lump sum and savings in Bonds. Interest rates are now abysmal and I'm looking for a better return. I'm considering buying a property so that I can rent it out. (Trust me to think about it after the new Stamp Duty rules). It's not my hearts desire to become a Landlord, far from it but it makes financial sense. I've been looking on-line at the HMRC web site to glean what information I can about the matter, in particular, self assessment tax returns. It would be in my wife's name as she is a non tax payer but in reality it would be me doing everything. Having looked at the web site my "head's a shed", if you get what I mean. There are so many things that, (At the moment), I know little or nothing about and reading it makes the prospect seem daunting.

I'm interested to know how much an Accountant might charge to do tax returns if I shy away from it.

It !!!!es me off that my wife and I have gone through the high interest rates of the late 70s & early 80s, worried are selves sick that I could be made redundant as was often happening with the company I worked for. I worked every hour I could physically manage to earn enough money to make capital payments off my mortgage so that if I was made redundant we and our children would at least have a roof over our heads. During all this we both had in mind that my wife would get her State Pension at 60, (2 yrs ago) and this would help our finances until I got mine at 65, Ha bloomin Ha, they changed the rules and now she won't get it until she is 66. (At least I'm on track to get mine at 65). The government has been banging on about how we should all save for our retirement to ease the financial burden and when you do, they start declaring how we now have a wealthy load of OAPs and we may get penalized for it in the future.

Now, at our time of life, after all the hard work to make ourselves financially sound, we find ourselves being faced with the prospect of becoming Landlords and all the responsibility and burden that comes with that, to keep our savings from depreciating as they are now, rather than just simply enjoying our retirement.

Why would you want to become a landlord, a little learning about investments is a lot easier. Probably similar returns but far less hassle, stock markets are high but house price valuations are also stretched across much of the country.

Taxation now better for investing. Whether that be through pensions, isas or unwrapped, you get tax relief on pension contributions, isas aren't taxed in income or withdrawal and even unwrapped you have the capital gains tax allowance annually and the dividend allowance, meaning you are making a lot of money to be paying much tax at all.

fox_warrior

bigadaj wrote: »

Why would you want to become a landlord, a little learning about investments is a lot easier. Probably similar returns but far less hassle, stock markets are high but house price valuations are also stretched across much of the country.

Taxation now better for investing. Whether that be through pensions, isas or unwrapped, you get tax relief on pension contributions, isas aren't taxed in income or withdrawal and even unwrapped you have the capital gains tax allowance annually and the dividend allowance, meaning you are making a lot of money to be paying much tax at all.

I don't agree. We will get equivalent to 3.75% interest for our investment. Once it's up and running we will have a regular income that will be tax free as my wife is a non tax payer. I've done a bit more research and we're happy to pay an accountant to look after the tax returns, leaving us to enjoy our retirement knowing our money invested wisely. Although house prices can fluctuate, over time, they always increase. For me stock markets are too volatile and could be a quick way to lose a lot of money. Yes they go up as well as down but it's too risky for me and requires a lot of "Monitoring". We prefer the safer option. As I said, it's not something we "Want" to do but it does seem the most appropriate option for us.

jonesMUFCforever

fox_warrior wrote: »

I don't agree. We will get equivalent to 3.75% interest for our investment. Once it's up and running we will have a regular income that will be tax free as my wife is a non tax payer. I've done a bit more research and we're happy to pay an accountant to look after the tax returns, leaving us to enjoy our retirement knowing our money invested wisely. Although house prices can fluctuate, over time, they always increase. For me stock markets are too volatile and could be a quick way to lose a lot of money. Yes they go up as well as down but it's too risky for me and requires a lot of "Monitoring". We prefer the safer option. As I said, it's not something we "Want" to do but it does seem the most appropriate option for us.

So you have factored in repairs, non payment of rent and the possibility that if you get a bad tenant your house could be trashed?
There are plenty of programmes on channel 4 and 5 which would put me off.

bigadaj

fox_warrior wrote: »

I don't agree. We will get equivalent to 3.75% interest for our investment. Once it's up and running we will have a regular income that will be tax free as my wife is a non tax payer. I've done a bit more research and we're happy to pay an accountant to look after the tax returns, leaving us to enjoy our retirement knowing our money invested wisely. Although house prices can fluctuate, over time, they always increase. For me stock markets are too volatile and could be a quick way to lose a lot of money. Yes they go up as well as down but it's too risky for me and requires a lot of "Monitoring". We prefer the safer option. As I said, it's not something we "Want" to do but it does seem the most appropriate option for us.

Unfortunately that probably shows you have little understanding of what a 'safe' option is.

You quote an equivalent interest rate, this is presumably the rent, though it's the same thing, as the yield would be from an equity investment. How have you calculated this, have you factored in all costs in purchase, maintenance, charges, insurance, many councils are now imposing additional costs in terms of maintenance and upgrades to property.

Even if that is a net yield it's very poor for an at risk investment. What happens when your tend at defaults, and potentially damages the property; this happened to my wife last year, luckily she was covered by insurance but this ran into several thousand pounds all in.

Tax treatment for landlords is intentionally getting more harsh, as opposed to the reliefs open to people for investments whether within a pension, isa or unwrapped as I've stated above.

House prices generally rise but given the extended prices currently over much of the country, with income multiples double those of average and the fact that the near zero interest rates won't continue for ever, my opinion is that prices will stagnate or possibly fall over the coming years.