Confused: tax band 21% process

jem16

FloraandFauna said:

Ooo-er.

Just spoken to a very nice lady at HMRC to amend my tax code. She's lovely, but she didn't know what a SIPP was, and didn't know that Scotland had different income tax bands.  You can imagine - between the two of us terminology-lite ignoramuses - how well that conversation went.

Still, she's done something that's resulted in my tax code increasing slightly, so... that's good?

What has your code changed to?

FloraandFauna

It was 1282 (WFH since March alteration requested only a couple of months ago)

1304 now - so clearly we're not talking enormous amounts generated by that extra 1% of contributions this year 

She's (we hope) set it for next year as well, on next year's predicted contributions, which will be different again.

Dazed_and_C0nfused

That is provisionally allowing an additional £46.20 tax relief (£220 x 21%).

FloraandFauna

That sounds about right - I only opened the SIPP in August so don't laugh at my tiny amounts! I'm a BR tax payer paying a mortgage by myself, so there isn't a lot to spare atm, although things should get easier as the years pass.

Better to get my head round process now, then have to sort it out when potentially much larger sums are at stake if I mess it up.

Dazed_and_C0nfused

I'm a BR tax payer 

If that were true you would have to pay the £46.20 back 

jem16

FloraandFauna said:

That sounds about right - I only opened the SIPP in August so don't laugh at my tiny amounts! I'm a BR tax payer paying a mortgage by myself, so there isn't a lot to spare atm, although things should get easier as the years pass.

if you're paying 21% tax then you're not a Basic Rate taxpayer but an Intermediate taxpayer.

FloraandFauna

There goes my terminology again 

I thought Scottish 20% was called intermediate*, and Scottish 21% was called base rate. You are both, of course, correct, and I am an intermediate tax payer.

*  no idea why, probably because I've spent years of my working life with the base rate being the one just below the higher rate, so any bands below base rate must be the ones with the extra names... 

jem16

FloraandFauna said:

*  no idea why, probably because I've spent years of my working life with the base rate being the one just below the higher rate, so any bands below base rate must be the ones with the extra names... 

There are changes both below and above. Basic Rate tax is still 20% in Scotland but the tax bands are different. They've also added a Starter rate and an Intermediate rate as well as changing the amounts within each band. Nothing like making it more complicated just for the sake of it!

https://www.gov.uk/scottish-income-tax