Share Save tax question

Sumselkb

So in 2018 I took out a 3 year share save with the company I work for and paid £50 a month every month which came to £1,800 after the 3 years.

In 2021 when it matured the share price had gone up so it was worth £2,820 and when it came time to sell and transfer the money to my bank account there was a £20 commission but no other charges and I transferred £2,800 to my bank account.

In 2021 I started another share save with my company, but this one was different. Rather than paying £50 a month every month for 3 years this was a 6 month plan. I paid £180 a month every month between January and June 2021 which came to £1,080. In July the company took this total to buy shares, but also matched the amount of shares 1 for 1 but the matching shares were locked for 1 year. 

So this week the matching shares finally unlocked but I noticed something. There was a "Confirmation of sell to cover" where some of the matching shares were sold to cover debts. On the website I read a note which said something like:

"For countries where we were required to withhold taxes, we have sold sufficient shares to cover this. The reduced number of Matching Shares are now available to view on your account."

I also read something about:

"Debits

Taxes - Taxes Withheld -247.12 GBP"

Finally, I read this on the website when I was reading about the Tax FAQ:

"Please note that if you are a UK Participant, for any taxable transactions, an Income Tax and National Insurance rate of 47% will be applied to your trade and sent to payroll.

This is the top rate of Income Tax that can be applied in the UK. If you usually pay Income Tax and National Insurance at a lower rate, please note that any over payment of Income Tax will be returned to you via payroll on the next available pay run."

So if I understand this right, when the sell to cover was executed (I did not do this personally, it did it automatically) some of the shares were sold for the purpose of withholding taxes and were sent to presumably the government.

My salary is only about £8,000 a year because I work part-time and I am not in the top rate of income tax so if I understand correctly then when I next get paid will I get some of the £247.12 back that was debited in my next payslip? Or will I not get any of it?

Why does this have to be all so confusing?

Thanks for any help, it will be much appreciated. 

george4064

Are your company shares listed in the U.K. or US?

If you were taxed at the higher rate and you’re a lower rate taxpayer, then yes, you should get that tax back via PAYS it looks like.

Sumselkb

george4064 said:

Are your company shares listed in the U.K. or US?

If you were taxed at the higher rate and you’re a lower rate taxpayer, then yes, you should get that tax back via PAYS it looks like.

My company is in the UK and listed on the LSE. I definitely don't get taxed at the higher rate as I earn less than £10 an hour.

I'm confused as to why with the first 3 year share save I only paid a £20 commission and no taxes, and yet with this 6 month one they are witholding taxes. 

The only tax I was aware of when reading the plan rules was CGT, but that is only if you earn profit of over £12,300 or something like that?

The change might be something to do with Brexit and the rules are different now?

Anyway I get paid in a week so I will see if I get it back on my next payslip.

Thanks for the help.

wmb194

Sumselkb said:

george4064 said:

Are your company shares listed in the U.K. or US?

If you were taxed at the higher rate and you’re a lower rate taxpayer, then yes, you should get that tax back via PAYS it looks like.

My company is in the UK and listed on the LSE. I definitely don't get taxed at the higher rate as I earn less than £10 an hour.

I'm confused as to why with the first 3 year share save I only paid a £20 commission and no taxes, and yet with this 6 month one they are witholding taxes. 

The only tax I was aware of when reading the plan rules was CGT, but that is only if you earn profit of over £12,300 or something like that?

The change might be something to do with Brexit and the rules are different now?

Anyway I get paid in a week so I will see if I get it back on my next payslip.

Thanks for the help.

The second scheme was different though i.e. your employer gave you some shares at no cost. This is what you'll be getting taxed on as it's a form of remuneration. If they say that it should be refunded for people in your situation in the next payroll I'd just wait to see what happens and go from there. Worst case scenario you could file a self assessment tax return and have it refunded directly from HMRC that way.

milton1970

Possibly a Partnership Share Scheme rather than a SAYE but not clear why they deducted charges unless you took the shares out (sold) before allowed under scheme.

Sumselkb

wmb194 said:

Sumselkb said:

george4064 said:

Are your company shares listed in the U.K. or US?

If you were taxed at the higher rate and you’re a lower rate taxpayer, then yes, you should get that tax back via PAYS it looks like.

My company is in the UK and listed on the LSE. I definitely don't get taxed at the higher rate as I earn less than £10 an hour.

I'm confused as to why with the first 3 year share save I only paid a £20 commission and no taxes, and yet with this 6 month one they are witholding taxes. 

The only tax I was aware of when reading the plan rules was CGT, but that is only if you earn profit of over £12,300 or something like that?

The change might be something to do with Brexit and the rules are different now?

Anyway I get paid in a week so I will see if I get it back on my next payslip.

Thanks for the help.

The second scheme was different though i.e. your employer gave you some shares at no cost. This is what you'll be getting taxed on as it's a form of remuneration. If they say that it should be refunded for people in your situation in the next payroll I'd just wait to see what happens and go from there. Worst case scenario you could file a self assessment tax return and have it refunded directly from HMRC that way.

It is a different scheme and when I read over the plan rules the only tax it talks about is Capital Gains Tax so I didn't know that there would be this withholding tax. I will wait and see what my next payslip says.

Sumselkb

milton1970 said:

Possibly a Partnership Share Scheme rather than a SAYE but not clear why they deducted charges unless you took the shares out (sold) before allowed under scheme.

I didn't sell the shares early, I kept them for the full 1 year holding period required.

Sumselkb

I checked my payslip and I did not get any of the withheld tax back.

Sumselkb

To update I did get some of the money back on a later payslip (two months later) about £140.

There is a new share save starting soon with my work. It's not the 6 month one with matching shares but like the original one where money is deducted from my salary every month for either 3 or 5 years and at the end there will be a small commission (eg £20) but no taxes.

When it comes to paying CGT am I right in thinking that you only pay it if you make more than £12,000 of profit?

For example, if I pay £200 a month, every month for 5 years, and that comes to £12,000, and I get a certain amount of shares, then I would only pay CGT if the shares went up and I had £24,000 or more then I would have to pay it?

Also, if I keep the shares for 5 or more years without selling them then I don't have to pay CGT?

Lastly, if I put the money into an ISA then I don't pay CGT? 

I suppose it's wishful thinking that £12,000 will double to £24,000 but I can always hope