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Effect of tax free redundancy pay and rent a room income on HMRC personal tax allowances

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Effect of tax free redundancy pay and rent a room income on HMRC personal tax allowances

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BPLBPL Forumite
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Hi,
I realise these are "tax free" at up to £30k and up to £7k5. Does any income received from these sources have to be added to your other income on your tax form.
I discovered this issue with savings income which was tax free as under £1000 but then realised HMRC add it to your income to assess your personal allownces tax ban thus pushing me into a higher band (40%).....and then having only £500 tax free interest. I know this is basic but a search revealed not a lot online. Here's hoping someone can help.
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  • Jeremy535897Jeremy535897 Forumite
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    These are exemptions, so do not get taken into account in working out what your marginal tax rate is.
  • BPLBPL Forumite
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    Are both amounts exempt and savings a special case?
  • Jeremy535897Jeremy535897 Forumite
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    Savings aren't exempt, they just have special rates of tax, including 0%, depending on circumstances.
  • BPLBPL Forumite
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    Yes i thought that and tax return calculation confirms it. I was wondering about redundancy pay and rent a room income.
  • Jeremy535897Jeremy535897 Forumite
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    BPL said:
    Yes i thought that and tax return calculation confirms it. I was wondering about redundancy pay and rent a room income.
    Yes, and as I have said, they are exempt from tax, like many benefits, lottery winnings etc.
  • dctrgredctrgre Forumite
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    Redundancy payments may need to be reported on your tax return- box 9 on page 2 of the Additional Information pages (SA101). See the SA101 notes for more information. 
  • dctrgredctrgre Forumite
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    Rent a room income should also be disclosed on the property pages; as long as the income is less than £7500 (£3750 if let jointly) you just need to tick box 4 of the property pages.
  • Jeremy535897Jeremy535897 Forumite
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    dctrgre said:
    Redundancy payments may need to be reported on your tax return- box 9 on page 2 of the Additional Information pages (SA101). See the SA101 notes for more information. 
    dctrgre said:
    Rent a room income should also be disclosed on the property pages; as long as the income is less than £7500 (£3750 if let jointly) you just need to tick box 4 of the property pages.
    I think OP was just using these as examples, rather than asking how to report them.
  • BPLBPL Forumite
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    10 Posts
    Thanks for all the information including how to report them on the tax form. Having my marginal tax rates breached due to a possible £37500 additional income was a bit scary so I am glad I now understand it. I wish HMRC would allow you to pre-populate your self assessment to test these scenarios without having to bother experts like yourselves. Maybe there is a software product I could use ideally free....
  • uknickuknick Forumite
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    BPL said:
    Thanks for all the information including how to report them on the tax form. Having my marginal tax rates breached due to a possible £37500 additional income was a bit scary so I am glad I now understand it. I wish HMRC would allow you to pre-populate your self assessment to test these scenarios without having to bother experts like yourselves. Maybe there is a software product I could use ideally free....
    If you're talking about the online tax return, I thought you could.  In the past I've entered figures, looked at the calculation to see the effect and then taken them back out again. 
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