Leaving Company SIP - Taxable Income

sknight82

I left a company whilst in a SIP scheme, therefore Tax and NI due for shares less than 3 years old and between 3 and 5. This resulted in a Taxable Income amount of £11,700 and thus circa £4.5k of tax and £272 NI due. I sold shares to cover and moved share into bed and sit ISA for CGT purpose.

The monthly contributions I made into the SIP to generate this share holding were considered in previous years Taxable income for my tax code etc. calculations. However, the company I worked for has reported the £11,700 as a Taxable amount in this FY. Is this correct? This amount is now affecting my taxable amount for FY24/25 and a significant impact on my tax code for next year given the tax thresholds in place.

Despite trying to reach out to HMRC etc. I am struggling for clarity on the application of the £11,700 in this FY against PAYE?   

Brie

Do you mean you were in a share purchase scheme?  normally the amount that you pay towards these each month are deducted before tax etc is calculated hence needing to pay tax when you leave sooner than anticipated.  

Have you checked your payslips?  I think that might be an easier thing to do than trying to get something from HMRC.  

sknight82

Yes that is correct - a share purchase scheme. £150 per month was deducted from my gross salary, so I benefited from the tax saving on this amount, although the £150 was included in the taxable income the company declared. 

I understand the requirement to pay tax and NI having exited early, but surprised that the taxable amount is being declared as a taxable income amount (not on payslip but via P45)... I can only assume it is because I could sell the shares straight away and pocket this income amount. 

DRS1

Are you asking if the £11700 should be backdated to the years when you made the contributions to the SIP?  If so the answer is No.

sknight82

I think I have reached the question of - Is the £11,700 classed as an employment income for this FY. It sounds like it is and I will there for need to utilize pension etc. to reduce my adjusted net income for the FY.