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Self-assessment tax payment due 31 January

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Self-assessment tax payment due 31 January

edited 30 November -1 at 12:00AM in Cutting Tax
7 replies 529 views
etiennegetienneg
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edited 30 November -1 at 12:00AM in Cutting Tax
A friend lives and works (and is paid) abroad. He has rental income from a flat in the UK (around £5,000) and a small amount of interest on UK accounts. For the first time, HMRC required completion of a SA form for 2018-19, which he did when back in UK during last summer.

HMRC accepted that foreign pay is irrelevant, and no tax is owed on UK interest, but have asked for 20% tax on rental income (so £1,000 - half by 31 January and half later), as no personal allowance was used. He is a UK citizen, so qualifies for personal allowance without any further requirements. Although this fact was included on the SA forms, it seems from what I've read since that personal allowance has to be explicitly claimed each year!

So, whilst in UK again for Christmas, he completed the form to claim personal allowance and sent this back to HMRC (with a note referencing their calculation). Nothing has come back so far, so the question is, should the first payment be made this week, knowing it will have to be refunded later, or can he wait for their response? We are both new to SA, so have no experience of what happens, and want to avoid late payment penalties (which we think are quite high?). Any suggestions, please?

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  • Dazed_and_confusedDazed_and_confused
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    HMRC accepted that foreign pay is irrelevant, and no tax is owed on UK interest, but have asked for 20% tax on rental income (so £1,000 - half by 31 January and half later),

    This doesn't totally make sense.

    Firstly HMRC tend not to "accept" anything with Self Assessment, they usually process the return as it had been completed and if they don't like something have upto a year or so to ask question or start an investigation.

    Secondly, any tax due for 2018:19 is payable in full by 31 January 2020 (or maybe a little later if the return was issued to your friend a little later than normal).

    It is payments on account for the 2019:20 tax year which would be part payable in January 2020 and part in July 2020.

    First and foremost you need to get him to check the amount shown as payable on his Self Assessment account as you appear to be missing a crucial element.
  • HasbeenHasbeen
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    etienneg wrote: »

    HMRC accepted that foreign pay is irrelevant, and no tax is owed on UK interest, but have asked for 20% tax on rental income (so £1,000 - half by 31 January and half later),

    Does HMRC not allow a fixed £1000 allowance in expenses? so should only be £800
  • Cook_CountyCook_County
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    Your friend will have registered as a non-resident landlord. It sounds if the UK tax return was not correctly completed. Is your friend declaring the income in the country where he lives?
  • I am in the same position but have been told by one HMRC technical adviser not to show my overseas income in the employment section which takes my UK income below the personal allowance threshold (so I only have a small amount of gift aid payment to make). I pay income tax in Italy on my earnings in Italy which has a double taxation treaty with the UK. I am tearing my hair out as I have been told so many different things by different HMRC staff!
  • Cook_CountyCook_County
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    el_coucho wrote: »
    I am in the same position but have been told by one HMRC technical adviser not to show my overseas income in the employment section which takes my UK income below the personal allowance threshold (so I only have a small amount of gift aid payment to make). I pay income tax in Italy on my earnings in Italy which has a double taxation treaty with the UK. I am tearing my hair out as I have been told so many different things by different HMRC staff!
    Are you UK resident or non-UK resident using the UKs SRT?
  • I am UK domiciled but a non-resident for 2018-19 (also for the previous year, but I worked in the UK for the 5 years before this and 15 out of 20 previous years).
  • Cook_CountyCook_County
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    el_coucho wrote: »
    I am UK domiciled but a non-resident for 2018-19 (also for the previous year, but I worked in the UK for the 5 years before this and 15 out of 20 previous years).
    As a non-resident the return only reports UK source income and gains plus the non-residence pages. It sounds as if these pages were incomplete, so I suggest filing an amended return.
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