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  • FIRST POST
    • Gonna-be-debt-free
    • By Gonna-be-debt-free 18th Nov 19, 6:13 PM
    • 60Posts
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    Gonna-be-debt-free
    How do I pay (not reclaim) the tax?
    • #1
    • 18th Nov 19, 6:13 PM
    How do I pay (not reclaim) the tax? 18th Nov 19 at 6:13 PM
    As a top rate tax payer I am going to need to pay additional tax on my PPI reclaim. Do I just declare the statutory interest as income on my tax return? I am assuming it goes in Box 1 as would any other interest. Where would I enter the tax already paid (the 20% deducted at source)?

    As OH is a zero rate tax payer, I assume he needs to fill in an R40 form to reclaim the tax deducted from his PPI refund.

    I also assume there is no way to combine the two to take advantage of OH's unused tax allowances (but happy to be told otherwise!).
Page 1
    • Dazed and confused
    • By Dazed and confused 18th Nov 19, 7:28 PM
    • 5,582 Posts
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    Dazed and confused
    • #2
    • 18th Nov 19, 7:28 PM
    • #2
    • 18th Nov 19, 7:28 PM
    Yes, it is just part of your taxable income.

    It does go in box 1. You don't declare the tax deducted. HMRC will use the figure in box 1 to calculate the gross income and tax paid.

    If other half hasn't been asked to file a Self Assessment return for the year in question then yes, an R40 would be the correct form.

    You might be able to have some of your other half's allowances. Are you married? And if so how old are they and if not 80+ how old are you?
    • Gonna-be-debt-free
    • By Gonna-be-debt-free 19th Nov 19, 10:48 AM
    • 60 Posts
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    Gonna-be-debt-free
    • #3
    • 19th Nov 19, 10:48 AM
    • #3
    • 19th Nov 19, 10:48 AM
    Thank you!

    Silly question - If I don't tell HMRC about the tax already deducted, how will they know? (Or is that already assumed because all banks do that with interest payments?).

    Yes, OH and I are married. He is 47, I am 46.
    • Moneyineptitude
    • By Moneyineptitude 19th Nov 19, 11:48 AM
    • 25,007 Posts
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    Moneyineptitude
    • #4
    • 19th Nov 19, 11:48 AM
    • #4
    • 19th Nov 19, 11:48 AM
    If I don't tell HMRC about the tax already deducted, how will they know?
    Originally posted by Gonna-be-debt-free
    The Bank have paid the tax on YOUR behalf from YOUR redress.

    If you don't fill in the tax return correctly and honestly I shouldn't have to tell you the consequence.
    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/271776/HMRC_issue_briefing_-_tackling_tax_evasion.pdf
    • Gonna-be-debt-free
    • By Gonna-be-debt-free 19th Nov 19, 12:56 PM
    • 60 Posts
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    Gonna-be-debt-free
    • #5
    • 19th Nov 19, 12:56 PM
    • #5
    • 19th Nov 19, 12:56 PM

    No, that's not what I meant at all
    20% tax has already been deducted. My question was, if I have no way to tell them that the 20% has already been deducted, what is to stop them deducting a full 46% from the interest payment, rather than just the remaining 26% that is due.
    • BoGoF
    • By BoGoF 19th Nov 19, 4:54 PM
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    BoGoF
    • #6
    • 19th Nov 19, 4:54 PM
    • #6
    • 19th Nov 19, 4:54 PM
    Because by entering it in the box you have been advised you are telling them it has already been taxed. There is a seperate box for untaxed interest.

    I assume the 46% and 26% you refer to should be 40 and 20?
    • Gonna-be-debt-free
    • By Gonna-be-debt-free 19th Nov 19, 5:04 PM
    • 60 Posts
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    Gonna-be-debt-free
    • #7
    • 19th Nov 19, 5:04 PM
    • #7
    • 19th Nov 19, 5:04 PM
    Because by entering it in the box you have been advised you are telling them it has already been taxed. There is a seperate box for untaxed interest.

    I assume the 46% and 26% you refer to should be 40 and 20?
    Originally posted by BoGoF
    Ah! Thank you I couldn't access an actual form to check.

    46% = top rate income tax for Scotland. I have already been taxed at 20% at source, so still 26% to pay (but I didn't want to accidentally pay an extra 46% on top of the 20% already taxed at source). Now I just need to remember about it for a year to put it in the return.

    Thanks so much for your help all
    • BoGoF
    • By BoGoF 19th Nov 19, 5:56 PM
    • 5,540 Posts
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    BoGoF
    • #8
    • 19th Nov 19, 5:56 PM
    • #8
    • 19th Nov 19, 5:56 PM
    Top rate.......lucky you.

    Hopefully you are maximising pension contributions to mitigate.
    • Dazed and confused
    • By Dazed and confused 19th Nov 19, 10:27 PM
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    Dazed and confused
    • #9
    • 19th Nov 19, 10:27 PM
    • #9
    • 19th Nov 19, 10:27 PM
    46% = top rate income tax for Scotland. I have already been taxed at 20% at source, so still 26% to pay (but I didn't want to accidentally pay an extra 46% on top of the 20% already taxed at source). Now I just need to remember about it for a year to put it in the return.
    You have misunderstood how tax works for Scottish residents.

    The Scottish government has no powers over the taxation of interest (or dividends) so the tax rates on interest is the same in Scotland as it is for the rest of the UK.

    So only 45% in total, not 46%
    • Gonna-be-debt-free
    • By Gonna-be-debt-free 20th Nov 19, 10:25 AM
    • 60 Posts
    • 53 Thanks
    Gonna-be-debt-free
    Top rate.......lucky you.

    Hopefully you are maximising pension contributions to mitigate.
    Originally posted by BoGoF
    Honestly, I have no idea I am good at earning it, not so good (but not awful) at looking after it. I pay a fair wack into pensions, but there is no real strategy. I am signed up to see a financial adviser that my company pays for, but it's face to face in London and I never seem to have time when I'm in London. (And I am now taking this way off topic for this forum).

    You have misunderstood how tax works for Scottish residents.

    The Scottish government has no powers over the taxation of interest (or dividends) so the tax rates on interest is the same in Scotland as it is for the rest of the UK.

    So only 45% in total, not 46%
    Originally posted by Dazed and confused
    Ah! All the better. Although I absolutely do not begrudge paying the extra 1%.
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