1st time on self-assessment

discoinferno_99

Hi everyone.

My tax affairs have been pretty straight forward for a number of years. I'm on PAYE, with a small amount of property income (shared 50/50 with my wife) and an one off annual pension contribution. In the past I updated HMRC with these figures for the previous tax year and they adjusted my tax code accordingly for the current tax year to reclaim the higher rate pension relief.

After some issues last year with regards to getting the 2016/17 figures updated with correct property income and pension contribution, I was finally told a number of months later that my account had been flagged for self-assessment. This was fine, with a June 2018 deadline for me to get my 2016/17 form done.

Everything has been pretty straight forward, except that the calculation shows that I owe circa £850 of tax. This is pretty much due to my tax code in 2016/17 via PAYE giving me tax relief on my 2015/16 pension contribution, (code 1572L) whilst the self-assessment form calculates everything based on a personal allowance of £11,000, hence it believes I have paid too little.

Having spoken for 45 minutes to HMRC today, the member of staff was very nice, but didn't really know how to address this via the self-assessment and suggesting submitting the form as is and appealing if I disagreed with the calculation. They said that I have 28 days to pay in full from submitting the form and this will have to be done, even if in appeal.

As it was my first time on self-assessment, I wanted to check with wiser heads here before submitting anything.

- Is there somewhere in the self-assessment process that I can flag up the 2015/16 pension relief that was due to be received in 2016/17?
- If not, do I just submit the form as is? In which case, how do I then go about getting an appeal in place for the pension relief to be taken in to account?

Apologies for the length of this post, but I wanted to try to give as much useful detail and try to explain things as best I can.

Thanks in advance.

[Deleted User]

- Is there somewhere in the self-assessment process that I can flag up the 2015/16 pension relief that was due to be received in 2016/17?

I am not sure that I understand in that pension premiums paid in 2015/16 are eligible for relief in ......2015/16! Are you also due pension relief in 2016/17? Are you looking to make an outstanding claim for 2015/16 which is entirely separate to your tax return for 2016/17?

pramsay13

I'm sure there's a section at the end that says something like are you claiming for underpaid / overpaid tax in previous tax years.
You can complete the form and then just save it without sending it if you still need to check although hopefully by then you will have answered your own question.

discoinferno_99

[Deleted User] wrote:

- Is there somewhere in the self-assessment process that I can flag up the 2015/16 pension relief that was due to be received in 2016/17?

I am not sure that I understand in that pension premiums paid in 2015/16 are eligible for relief in ......2015/16! Are you also due pension relief in 2016/17? Are you looking to make an outstanding claim for 2015/16 which is entirely separate to your tax return for 2016/17?

To clarify, I have previously told HMRC of one-off pension contributions on the telephone. These have typically been made in late March, so HMRC have adjusted my tax code to increase my personal allowance so I receive my higher rate of pension relief. The 2015/16 pension relief was applied to my tax code for 2016/17 and applied via my employer on PAYE. So I understand what you are saying re the eligibility for relief being for 2015/16, but in this case (and in previous years) HMRC have passed it back in the following tax year.

What is confusing me is that I have already made a claim for the 2015/16 pension relief and they applied this to my 2016/17 tax code. With this being the first period I have been asked to do self-assessment, the self-assessment process is looking at the 2016/17 figures in isolation and is calculating tax being owed as I was paid by my employer based on the increased tax code to give me the pension relief. What is the best course of action to balance this?

discoinferno_99

pramsay13 wrote: »

I'm sure there's a section at the end that says something like are you claiming for underpaid / overpaid tax in previous tax years.
You can complete the form and then just save it without sending it if you still need to check although hopefully by then you will have answered your own question.

There is, although from reading the accompanying notes and also from feedback from the HMRC employee I spoke to, it doesn't apply to my situation.

BoGoF

Just to be clear - did you pay any pension contributions in 16/17?

discoinferno_99

BoGoF wrote: »

Just to be clear - did you pay any pension contributions in 16/17?

Yes, there is also another one off private contribution in 2016/17 that I have included on the form.

BoGoF

In that case the 16/17 underpayment is correct. It is normal for HMRC to carry forward tax reliefs to the following year assuming they will be paid again.

As was said above tax relief has to be given in the year they were paid. Did you complete a return for 15/16? If so you need to make a claim to Overpayment Relief. If not you need to get HMRC to review the year to reflect the pension contributions.

discoinferno_99

BoGoF wrote: »

In that case the 16/17 underpayment is correct. It is normal for HMRC to carry forward tax reliefs to the following year assuming they will be paid again.

As was said above tax relief has to be given in the year they were paid. Did you complete a return for 15/16? If so you need to make a claim to Overpayment Relief. If not you need to get HMRC to review the year to reflect the pension contributions.

Thanks very much for the clarification. It is the first year I have had to do self-assessment for, so no return was done for 15/16.

It sounds like submitting the tax return as is and then putting in for a review. Thanks again for all the help in response. I wanted to make sure I get this submitted correctly and then understood what I needed to do for anything that I had that was outstanding. Very helpful.

Dazed_and_confused

In the past I updated HMRC with these figures for the previous tax year and they adjusted my tax code accordingly for the current tax year to reclaim the higher rate pension relief.

That does not and to the best of my knowledge never has happened.

As BoGoF has said the entry in your 2016:17 tax code is simply HMRC giving you some provisional tax relief for 2016:17 using an estimate of what you claimed tax relief on in the previous tax year.

As far as the Self Assessment return is concerned if you have completed it correctly then there is nothing to "review".

What you need to review, or ask HMRC to review/explain is your tax position for 2015:16. You may or may not have received any pension tax relief you are due for that year.

There are countless permutations of what might have happened, it could be as simple as the pension relief due for 2015:16 could have offset additional tax due for some other reason (your rental income?) so you might not have been a refund or owed anything extra.

As you were outside of Self Assessment for 2015:16 a good starting point would be to check if HMRC ever sent you a P800 calculation for 2015:16. If not you probably need to go back to HMRC to understand what the correct position is for 2015:16.

Other than filing your return in due course it is too late to do anything now for 2017:18 but you might want to check your current tax code and see if you are happy with any pension relief being allowed. Remember this is estimated relief for the current tax year so if your earnings are going to be different (particularly if lower) or you expect to pay a different pension contribution then you might be best getting this year's tax code updated to avoid the probability of tax being owed for 2018:19

discoinferno_99

Just to close this off, thanks once again for the advice in this thread and for helping to get me to understand exactly needed to be done as the HMRC helpline was being too much help.

Anyway, self-assessment years all submitted and the 2015/16 year has been updated by HMRC now, which is triggering a rebate for that year, which more than covers the tax owed for 2016/17.

All understood and cleared up thanks to the help in this thread.