Tax allowances carried forward?

agent69

I am easing myself into early retirement via a 3 day week. I get paid minimum wage, with the balance of my remuneration being paid into my pension via salary sacrifice.


My monthly pay is therefore about £851. No tax deduction and only £22 NI. Happy days I thought, until I came to do last years tax return. I use my private car for business use and claim for the mileage (15 - 20,000 business miles for a 5 day week). That's fine for the last financial year when I was working full time, but in the current year I won't have any taxable income to offset the mileage claim against.


Can I carry over any unused tax allowance to future years (once various pensions kick in I will be well into the tax band again), or is it a case of use it or loose it.



I was thinking about forcing myself into the taxable band by either reducing the salary sacrifice, or possibly taking a DB pension early, but both sound a bit extreme just to save a few quid in tax rebate.


Any advice gratefully received

uknick

You can't carry forward the annual personal tax allowance, it's use it or lose it.

Dazed_and_confused

No carry forward of unused expenses (as an employee). No carry forward of any unused Personal Allowance.

If you have savings interest you will have
almost certainly also lost the ability to utilise the Personal Savings Allowance 0% tax band. But on the plus side have probably now freed up the savings starter rate band (upto £5,000 interest taxed at 0%).

If you are married you were probably eligible for Marriage Allowance but from the current tax year onwards (until pension income kicks in) you are probably eligible (as part of a couple) to benefit from Marriage Allowance as well.

This obviously depends when your income reduced to £851/month. Changing part way through the tax year might mean you are still a taxpayer in 2018:19 (before any expenses are considered).

Your best bet would be to try and persuade your employer to pay 45p/mile. Much better financially than claiming tax relief on the difference even if you were paying tax in the first place.

Tom99

[FONT=Verdana, sans-serif]Surely you are no worse off this year than last?[/FONT]
[FONT=Verdana, sans-serif]Last year you paid tax (say 20%) on 45p per mile so a net 36p. But you claimed tax relief on that 45p so you are back to 45p.[/FONT]
[FONT=Verdana, sans-serif]This year you don't pay any tax on the 45p so you are in the same financial position as last year.[/FONT]

tomlee80

I don't believe you can carry it forward