Any tips before filing the self-assessment

pred02

Hi,

I am relatively new to filing the self assessments as most of my takes are taken out through PAYE and i have no additional sources of income. I am earning just a bit over £100k and wanted to see before I file if there are any actions I can do to optimize/minimize tax burden - e.g. put money into a private pension?   I already contribute 8% of my salary to employer pension (employer matches 12%) I guess there isn't anything I can do  before Jan 31st to reduce tax burden?

I also understand that the £100k+ is the high tax range (e.g. 60%) because of my reduced personal allowance. For future years, what can I do to reduce the hit, is putting away to employer pension sufficient or do you recommend putting away into private pension? I do put away £4k into a LISA each year but that is not considered a private pension.

Thanks,

Grumpy_chap

pred02 said:

Hi,

I am relatively new to filing the self assessments as most of my takes are taken out through PAYE and i have no additional sources of income. I am earning just a bit over £100k and wanted to see before I file if there are any actions I can do to optimize/minimize tax burden - e.g. put money into a private pension?   I already contribute 8% of my salary to employer pension (employer matches 12%) I guess there isn't anything I can do  before Jan 31st to reduce tax burden?

I also understand that the £100k+ is the high tax range (e.g. 60%) because of my reduced personal allowance. For future years, what can I do to reduce the hit, is putting away to employer pension sufficient or do you recommend putting away into private pension? I do put away £4k into a LISA each year but that is not considered a private pension.

Thanks,

The SA you are filing now (January 2022) is for the tax year ended April 2021 so, short of a time machine, you can only accurately record what is done.  There is nothing you can do now (before January 31st) to reduce the tax burden for that tax year.

You may be able to do something now, you have until the end of March, to reduce the tax burden for the current tax year.  This may even be able to take advantage of some allowances from previous years that may not have been used and may be available to carry forward.  Increased pension contributions is the default answer in this position, especially given the pain of the withdrawal of the personal allowance, though even this needs to be considered in the light of all facts (particularly the LTA).

It may be worth seeking the advice of an Accountant to prepare you well for the future.  

On-the-coast

I basically agree with what Grumpy Chap is saying.
However, there is one thing that you can do to reduce your tax burden retrospectively, although it will leave you in a net slightly worse off financial position - your emotional credit may be enhanced though!
you can give to charity, and have that donation applied to the previous tax year.
see here for an explanation:
https://nvaccounting.co.uk/2021/09/02/tax-relief-on-charitable-donations/

pred02

Thank you very much on the kind advice, much appreciated. 

pramsay13

Why are you completing a self assessment if your income is paye?

pred02

Because I believe I need to complete it if my income is over £100k,

Dazed_and_C0nfused

pred02 said:

Because I believe I need to complete it if my income is over £100k,

That's true, even if Gift Aid or relief at source pension contributions reduce your adjusted net income to less than £100k you still need to complete one where taxable income is £100k or more.

MattMattMattUK

pramsay13 said:

Why are you completing a self assessment if your income is paye?

If you earn over £50k and have claimed Child Benefit in that tax year you need to complete a self assessment tax return.
https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

If you earn over £100k you need to complete a self assessment tax return.
https://www.gov.uk/income-tax-rates/income-over-100000

kazwookie

For next year go and see an accountant who specializes in personal tax, the cost of the meeting, should save you loads of tax.

pred02

kazwookie said:

For next year go and see an accountant who specializes in personal tax, the cost of the meeting, should save you loads of tax.

Thanks. How much should I expect to pay for an accountant? No additional revenue/business streams. 

kazwookie

Ring a few up and ask, I have no idea what area you live in.

Ask for a one off appointment for say an hour, make sure you have your paperwork in order and when you go don't spent time waffling / small talk, as you are paying.

My accountant charged £50, I took everything to her, about 3 days later it was done, she would also enter it on line if I want for another £20 I think.