How to avoid self assessment

dales1

It is far more preferable to file an easy SA return ...

... than to suffer the grief of people whose actual interest income differs from HMRC figures. (A tedious situation to resolve). Doing an SA return means your own figures of interest take precedence over theirs.

In all previous years, I would aim to sell enough shares to make capital gains of about £50 under the annual allowance, to avoid a CGT tax bill.

Nowadays I aim to sell enough to make capital gains of about £50 over the exempt allowance, so as to keep myself within the SA criteria.

Keep_pedalling

I used to hate my annual tax returns, and I was really glad when we managed to funnel all our GIA savings into ISAs so were no longer required to do them. 

InvesterJones

masonic said:

You would only need to file due to your investments if you disposed of investments worth more than £50k or made a capital gain of more than £3k, or (maybe) dividends above that allowance.

This does seem like a rather extreme case of tax tail wagging the dog. It may be wholly appropriate for you to invest some of your cash, but doing it for this reason is perhaps some more careful thought.

Pretty sure there's no requirement to begin SA if you dispose of investments worth more than £50k these days

poseidon1

Good to see the majority on this thread favour the control of one's tax affairs that come with self assessment.  However suspect OP  probably has far more in common with the majority of the population that prefer to be spoon fed their tax interactions with  HMRC , via tax code adjustments.

I personally find it distinctly odd that he finds it necessary to change his saving and investing behaviour  ( potentially to his detriment) to avoid taking control of his own tax reporting.

masonic

InvesterJones said:

masonic said:

You would only need to file due to your investments if you disposed of investments worth more than £50k or made a capital gain of more than £3k, or (maybe) dividends above that allowance.

This does seem like a rather extreme case of tax tail wagging the dog. It may be wholly appropriate for you to invest some of your cash, but doing it for this reason is perhaps some more careful thought.

Pretty sure there's no requirement to begin SA if you dispose of investments worth more than £50k these days

Yes that's right but OP has already been enrolled and wishes to avoid being asked to file next year.

redped

I used to do SA but don't any more, and I'm sorely tempted to start doing it again. That way, I'll know exactly how much tax I owe/am owed, rather than HMRC's annual guess based on their (inaccurate) estimates of how much interest I'll make this year. It doesn't matter if I correct their estimates, they never seem to get my tax code right. Doing SA means an evening of my calculations, rather than waiting many months for HMRC to correct their mistakes.

singhini

Many years ago, HMRC asked me to complete a Self Assessment, so I hired an accountant to help (I was shocked to realise I’d been paying £25k a year in income tax and NI).

She pointed out that if I wanted to reduce my tax bill, I could salary sacrifice more or put money into an SIPP and claim tax relief — I honestly had no idea what she was talking about at the time.

Fast-forward to today: most days I’m in bed until midday, yet I generate around £26,000 a year in income and pay zero tax.

Being forced to do Self Assessment taught me how taxation works and how to make the most of my allowances. Hiring that accountant was the best £150 I’ve ever spent.

jaypers

I prefer doing a SA. It’s not really that hard and you then know that any interest calculations are accurate. 

seacaitch

poseidon1 said:

Good to see the majority on this thread favour the control of one's tax affairs that come with self assessment.  However suspect OP  probably has far more in common with the majority of the population that prefer to be spoon fed their tax interactions with  HMRC , via tax code adjustments.

I personally find it distinctly odd that he finds it necessary to change his saving and investing behaviour  ( potentially to his detriment) to avoid taking control of his own tax reporting.

Rather silly referencing "what the majority think" as if that's necessarily an arbiter of what's sensible. 

It's quite possible to not be filing a Self Assessment return, while also not being "spoon fed their tax interactions with  HMRC , via tax code adjustments". It appears you may not realise this.

As I described earlier, my circumstances for nearly 10 years were that I no longer needed to submit SA, making life a touch administratively simpler without any tax-code adjustment nonsense. Quite possibly the OP's circumstances are similar to mine then (& the direction mine are moving in again), with no SA and no tax code - doesn't get much simpler than that. 
  

Uriziel

poseidon1 said:

Good to see the majority on this thread favour the control of one's tax affairs that come with self assessment.  However suspect OP  probably has far more in common with the majority of the population that prefer to be spoon fed their tax interactions with  HMRC , via tax code adjustments.

I personally find it distinctly odd that he finds it necessary to change his saving and investing behaviour  ( potentially to his detriment) to avoid taking control of his own tax reporting.

I don't understand how this is to my detriment. I pay 40% tax on the interest whereas if I move money to stocks I will only pay 28% tax. The interest I get is 4.75% while the average growth of the S&P of the last few years is 10% so I will be better off while also not having to file self assessment. I also moved £50k to premium bonds so with a bit of luck I will get a higher return than 4.75%x60%. I think this is a good decision.