Capital gains vs PAYE tax allowance

supersezzie

Hi all, 

I've just realised I lost out on my tax allowance in 2020-21 through my employment, and paid tax on all of my earnings pretty much (my p60 days code 314l) which worked out £1900 extra tax paid roughly. The only explanation I can find for this is selling my flat that year and I used up the c.£12000 tax free allowance on my capital gains return. 

I am struggling with conflicting advice online and had read that they were separate allowances in addition to each other. Please can someone confirm this is true and give me the good news that I've overpaid my tax?!

After being off sick for a year and unable to work, this is news I could really use right now, I was gutted to have to pay cgt as I had to move out of my flat and rent another place due to my circumstances and health issues, so it was never a second property. But I know the taxman doesn't care about that 😔). 

So I'm hoping for good news of a tax rebate but I guess I need clarification either way! *Braces self* 😬

[Deleted User]

There is a personal allowance of 12500 against income AND a capital gains allowance of 12300 available in that year. The two allowances are entirely separate.

Dazed_and_C0nfused

The only ways you can have a reduced (income tax) Personal Allowance are,

1.  Marriage Allowance applicant (for example you get a reduced Personal Allowance of £11,310 in the current tax year)

2.  Your adjusted net income exceeds £100k.  You lose your Personal Allowance on a sliding scale so once your ANI reaches £125,140 you have £0 Personal Allowance.

supersezzie

Thank you folks. This is hopeful news! I will speak to my employer to follow up why my code has changed as I don't know what's happened here. I can only hope its a mistake! Fingers crossed!! 

Dazed_and_C0nfused

Which tax year do you think you have paid too much tax in?

Your employer is unlikely to be able to resolve this as they act on information from HMRC.

If you provide more information about what has happened it might be possible to get to the bottom of it.  But if you have filed a Self Assessment return for the year in question only you will be able to correct things.  If indeed anything needs correcting.

supersezzie

It's for tax year 2020-2021. I only discovered this because I'm also self employed as well as paye so I was filing my tax return and discovered it. I have kept it provisional and haven't submitted the return yet but it doesn't leave me long to figure this out. 

[Deleted User]

Straw clutching maybe but have you entered your PAYE earnings and the tax deducted from them on the return?

Brie

I'm not sure how an employer can help you regarding a tax code over which they have no control.  And also I suspect the issue has more to do with having additional income from being self employed rather than CGT.

Only HMRC will be able to help.  Doesn't mean you won't get a refund, just what they will base it on.

supersezzie

[Deleted User] said:

Straw clutching maybe but have you entered your PAYE earnings and the tax deducted from them on the return?

Maybe not a bad thing for me to enter. It has done it automatically but I will double check. I have severe brain fog with my illness at the moment so I could have clicked something wrong there!

Oh actually, that can't be a thing. I have seen the odd tax code on my p60. 

sheramber

I was gutted to have to pay cgt as I had to move out of my flat and rent another place due to my circumstances and health issues, so it was never a second property. But I know the taxman doesn't care about that 😔). 

if you sold the flat you were living in you would not be due to pay capital gains tax.

p00hsticks

sheramber said:

I was gutted to have to pay cgt as I had to move out of my flat and rent another place due to my circumstances and health issues, so it was never a second property. But I know the taxman doesn't care about that 😔). 

if you sold the flat you were living in you would not be due to pay capital gains tax.

The OP may be saying that for some reason they had to move out of the owned property into rented but retained it / rented it out for a period before selling - therefore only ever owning one property but not their main residence for the entire period of ownership - in which case CGT is a possibility

OP - if you have an online tax account you may be able to look back and see how HMRC arrived at the tax code (I'm not sure if it lets you look back over past years)

https://www.gov.uk/personal-tax-account

A lot shot, but you;re not getting State Pension are you ? That is taxable but is paid gross, so HMRC would adjust the tax code to something similar to what you have....