investment bond - top slicing - tax due

JeffMason

Im going to back in, remove the 312 and 60
and double check just the (incorrect) tax figure due. That’s what I shall ask to be refunded in additional information.  Then put the 312 and 60 back and submit. 

Dazed_and_C0nfused

If you're not going to pay the amount due them there won't be a refund.

If you file a return showing £1245.20 due (inclusive of the disputed £1356.80 element) but don't pay that £1245.20 then you owe HMRC £1245.20.

Assuming HMRC then accept your position and a revised calculation is issued removing the £1356.80 element then the tax owed of £1245.20 becomes an overpayment of £111 (£1245.20 - £1356.80 = MINUS £111).

So the only refund you would get is £111

JeffMason

Dazed_and_C0nfused said:

If you're not going to pay the amount due them there won't be a refund.

If you file a return showing £1245.20 due (inclusive of the disputed £1356.80 element) but don't pay that £1245.20 then you owe HMRC £1245.20.

Assuming HMRC then accept your position and a revised calculation is issued removing the £1356.80 element then the tax owed of £1245.20 becomes an overpayment of £111 (£1245.20 - £1356.80 = MINUS £111).

So the only refund you would get is £111

Right. I'm not expecting of a refund beyond the £111 mark if I don't pay the tax due. But is there an option to not pay 1245.20 due?

Because if I do have to pay it then they owe me 1356.80 as a refund. 

I was trying to make the amount owed ZERO as it should be. And then wait for the £111 refund, but that doesn't seem to be possible...

[Deleted User]

JeffMason said:

Dazed_and_C0nfused said:

If you're not going to pay the amount due them there won't be a refund.

If you file a return showing £1245.20 due (inclusive of the disputed £1356.80 element) but don't pay that £1245.20 then you owe HMRC £1245.20.

Assuming HMRC then accept your position and a revised calculation is issued removing the £1356.80 element then the tax owed of £1245.20 becomes an overpayment of £111 (£1245.20 - £1356.80 = MINUS £111).

So the only refund you would get is £111

Right. I'm not expecting of a refund beyond the £111 mark if I don't pay the tax due. But is there an option to not pay 1245.20 due?

No. Just don’t pay it!

JeffMason

JeffMason said:

Im going to back in, remove the 312 and 60
and double check just the (incorrect) tax figure due. That’s what I shall ask to be refunded in additional information.  Then put the 312 and 60 back and submit. 

I say refunded above, on the assumption that they make me pay the tax due. I don't know how it works and thought I would have to pay it immediately on filing the return.

Jeremy535897

My suggestion originally was to add the £1,356.80 to the total figure of tax paid for 2020/21. Somewhere in the process you get the option to say what you have paid towards this year's liability, on top of the PAYE tax you have paid. I know you have paid no more, but if you say you have paid an extra £1,356.80, it will end up showing that you are due a refund of the amount relating to the expenses (presumably £111). You explain in detail that you have had to say that you have paid this amount to get the tax return to show the correct amount due (a repayment to you of £111).

[Deleted User]

Jeremy535897 said:

My suggestion originally was to add the £1,356.80 to the total figure of tax paid for 2020/21. Somewhere in the process you get the option to say what you have paid towards this year's liability, on top of the PAYE tax you have paid. I know you have paid no more, but if you say you have paid an extra £1,356.80, it will end up showing that you are due a refund of the amount relating to the expenses (presumably £111). You explain in detail that you have had to say that you have paid this amount to get the tax return to show the correct amount due (a repayment to you of £111).

I can’t agree with that Jeremy. HMRC have to make an adjustment to the liability as generated by the return. I don’t think that you can treat it as paid when it hasn’t been. I can’t agree with leaving the liability as it stands when it is incorrect and solving the problem by setting off a payment that doesn’t exist.

The approach I have suggested is that which I have used since SA commenced I.e. provide full details of the amendment required and the adjustment to the tax calculation.

We will see what transpires.

JeffMason

Ah. Ok. I think the confusion is a difference of opinion on how to deal with this.

So - 

@Jeremy535897 - you are saying don't pay it, but I don't how to not pay it..? I don't know how to make the amount due go to zero before I submit the return?

And @[Deleted User] - you are saying to pay it with all the additional information included, and asking for a refund of £1356.80 - which is actually a refund of my 1245.20 PLUS the £111.60 I should get anyway.

Dazed_and_C0nfused

I'll side with @[Deleted User] on this one.

Two wrong don't make a right and I think @Jeremy535897's suggestion is a step too far in this instance and adding in a false tax amount is only going to confuse matters even more.

[Deleted User]

JeffMason said:

Ah. Ok. I think the confusion is a difference of opinion on how to deal with this.

So - 

@Jeremy535897 - you are saying don't pay it, but I don't how to not pay it..? I don't know how to make the amount due go to zero before I submit the return?

And @[Deleted User] - you are saying to pay it with all the additional information included, and asking for a refund of £1356.80 - which is actually a refund of my 1245.20 PLUS the £111.60 I should get anyway.

Not refund - an adjustment to the tax arising from the calculation.

On the first point you CAN’T make the amount go to zero as I have stated. There is NO link from the additional information box to the calculation- it has to be a manual adjustment by HMRC.