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

BPL

uknick said:

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. 

Yes but not before the end of the current Tax year. If you want to forecast your tax liability and make plans to mitigate this AFAIK you have to use spreadsheets or presumably commercial software (i haven't tried any, suggestions welcome)

Jeremy535897

That is because the tax rules could change. For most people the rules don't change that much each year. The simplest way is to set up your own spreadsheet for 2019/20, make sure it gives you the right result by comparing it to the tax return software, and then adjust it for any known changes to rates etc for 2020/21.

BPL

Any recommendations for tax return software that i can populate in advance eg 1 year subject to govt tax changes? Excel is only fun for a while

Jeremy535897

I haven't heard of anything, but apart from some changes to NIC, 2020/21 looks very similar to 2019/20, at least in England (no change to main allowances or tax rates).

BPL

Yeah i have a payslip and tax calculation sheet. The payslip one is actually the mostbcomplicated with salary sacrifice etc