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Income Tax questions - help me if you can :)

cinoci Avatar
8y, 3m agoPosted 8 years, 3 months ago
Ok, maybe not the best forum for this but us avid money savers should know our stuff about tax, even if I don't.

Right the situation I'm in is as follows: My earnings from the current Tax year are below the personal allowance, so in theory I can claim back my tax at the end of the year as I have now stopped working and am a student. Hower I have a savings account, and am wondering if the interest I earn of this will be included in my "income" and therefore may push me over the personal allowance.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4015739

This link is the nearest I can find to an answer, but I can't make sense of it...if anyone has any knowledge of this then please share it with me, I have ~£900 resting on this :(

Just to add I didn't stop just shy of the personal allowance on purpose, it just happened this way, and I'll be gutted if my savings account ends up losing me money..

second alternative is calling them and just asking, has anyone had experience with them? Are they helpful?

Any help appreciated?

Cheers,

Cinoci
cinoci Avatar
8y, 3m agoPosted 8 years, 3 months ago
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banned 1 Like #2
no your savings interest will not be included as income as tax is taken at source
1 Like #3
Long time no see ya sexy devil!! :-D xx

(Sorry I can't help!! :p)
#4
sadiebabes
Long time no see ya sexy devil!! :-D xx

(Sorry I can't help!! :p)


Why thank you:p
1 Like #5
GAVINLEWISHUKD
Why thank you:p


And you as well!! You know you're one of my faves! :whistling: :p xx
#6
fragaliciousbob
no your savings interest will not be included as income as tax is taken at source


Fantastic!! :thumbsup: Thank you!! I'm £900 pounds up!! Who's coming to the pub??
Can I claim my tax back now or do I have to wait till april?

Cheers, will add rep in a sec :)
#7
sadiebabes
Long time no see ya sexy devil!! :-D xx

(Sorry I can't help!! :p)


Hey sadie, hows it goin??
I've been cutting back on my HUKD time, especially as the infamous JDeal has now left us..
I can't believe I'll get all that tax back!!! Woohooo..

I think you have been cutting back too, as I don't see your name popping up so often..
#8
cinoci
Hey sadie, hows it goin??
I've been cutting back on my HUKD time, especially as the infamous JDeal has now left us..
I can't believe I'll get all that tax back!!! Woohooo..

I think you have been cutting back too, as I don't see your name popping up so often..


Things are good... Where are you taking me to help you spend that cash?!?! :-D

I keep quiet now and let all the new people spam the boards :p

How've you been honey? xx
#9
sadiebabes
Things are good... Where are you taking me to help you spend that cash?!?! :D

I keep quiet now and let all the new people spam the boards :p

How've you been honey? xx


Yes, a whole lotta new people came at once and a whole lotta oldtimers left..frightening times..but I think things are finally settling down...I think......As long as these Admin vs. sassie fights in feedback forum settle down :w00t:,

I have been the usual, times are fantastic, and times are ****(please dont filter the word c**p word), but just now things are looking up :) ....I think...only time will tell, but £900 will certainly help :) I have already promised a holiday to someone else, soooo...I'm afraid there is only so much I can do with my cash sadie....but u r somewhere high on my priority list ;-) lol..
1 Like #10
Hi - your interest received on any bank investments IS counted as income and counts as such with regards to your personal allowance- so if this takes you over your personal threshold then YOU DO HAVE TO PAY TAX, and you wont get the rebate you're hoping for. (It's irrelevant that you've already paid tax on the bank interest if you're over your personal allowance) Sorry - not good news, but what the taxman doesn't know about..............
#11
bluedave
Hi - your interest received on any bank investments IS counted as income and counts as such with regards to your personal allowance- so if this takes you over your personal threshold then YOU DO HAVE TO PAY TAX, and you wont get the rebate you're hoping for. (It's irrelevant that you've already paid tax on the bank interest if you're over your personal allowance) Sorry - not good news, but what the taxman doesn't know about..............



You guys are killing me... I dread phoning them incase it doesn't go my way...and I don't know how to screw with the papers to make it go my way. AAArrrrrgggggghhhhhh...I need a finance advisor :(
1 Like #12
Hi. Unless the Savings interest is a substantial amount then you dont have to declare it. For example if its only a few quid then the taxman will not be interested at all in it. On the other hand, if the interest runs into the 100's then I'd declare. Anyways, if the gross amount you have earned is less than your personal allowance then you'll get all the tax back, but I think you have wait til the tax year end or write to the Inland Revenue and explain that you wont be working for the remainder of the tax year in which case they may give you a refund early. Hope this helps. Cheers.
1 Like #13
And yes april is the deadline meaning you probably won't get the money back till maybe next June at soonest.
If you really have savings that will earn you a great deal in interest consider lowering that by paying as much as you can upfront for a year , especially anything that may go up, ie offer the landlord a years rent upfront at todays rate
banned#14
bluedave
Hi - your interest received on any bank investments IS counted as income and counts as such with regards to your personal allowance- so if this takes you over your personal threshold then YOU DO HAVE TO PAY TAX, and you wont get the rebate you're hoping for. (It's irrelevant that you've already paid tax on the bank interest if you're over your personal allowance) Sorry - not good news, but what the taxman doesn't know about..............


the tax is already taken so there is no tax to pay unless you go over the threshold and enter the 40% band
#15
fragaliciousbob
the tax is already taken so there is no tax to pay unless you go over the threshold and enter the 40% band


I read the OP as having worked this year and paid tax on his earnings. He's now stopped working and because he hasn't earned enough money (hasn't exceeded his personal allowance)to pay tax is hoping to claim back the tax he has already paid. However, the interest on his money in his bank counts as earnings ( irrelevant whether or not this has had tax taken out at source) and this has caused him to go over the personal allowance threshold and so he DOES have to pay tax on the money earned in excess of that - and therefore can't claim tax back as hoped.
Maybe I misunderstood what the OP was about??
1 Like #16
gross wages plus gross int = total earnings

OP has had tax taken off both. If total earnings are over the personal allowance then tax is due on the amount above the personal allowance.

It sounds like the total tax due will be less than the that already deducted so a refund will be due.... but not till after April (tax man not likely to agree to anything before that)
1 Like #17
Agree with bluedave. Gross figures are used. Also even if your savings interest did put you over the allowance you would more than likely still be entitled to a rebate.

IE
You earn 500 per month for 4 month, your income tax rate assumes you will earn this every month and you are taxed accordingly to balance it out rather than paying all tax at once. If you stop after 4 months, you only earned 2000 which has been taxed on assumed earnings for the year. You send your P60 in at the end of th year with a note asking them to recalculate and they *should* refund the tax you ahve paid as your total earings are below the personal allowance.

So if you earned 5200 this year and your interest makes it 5700 then you still get the first 5345 (or whatever the limit is now) tax free so you woudl still be entitled to it.

Also, your savings, are they in an ISA? If so, tax free even if declared.

Finally, in terms of a rebate, no, will be in next tax year, they will not give you it back until they are sure you didnt earn more.

This is all my understanding of it, could be wrong.

Hope that helps.
#18
Thanks everyone for the replies :thumbsup: No my savings weren't in an ISA, I already have that at the £3600 limit sadly..

I read the OP as having worked this year and paid tax on his earnings. He's now stopped working and because he hasn't earned enough money (hasn't exceeded his personal allowance)to pay tax is hoping to claim back the tax he has already paid. However, the interest on his money in his bank counts as earnings ( irrelevant whether or not this has had tax taken out at source) and this has caused him to go over the personal allowance threshold and so he DOES have to pay tax on the money earned in excess of that - and therefore can't claim tax back as hoped.
Maybe I misunderstood what the OP was about??


Sounds about right, perhaps I will just apply for the rebate in april and see how we go...at the very, very least was emergency taxed for a few weeks, so will be due that back.

Cheers everyone, rep to be added in a mo :)

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