Income Tax

What are the benefits of appointing a tax adviser?

 

Personal tax advice should be just that, personal and tailored to your specific circumstances. You can only give the right advice if you take the time to get to know someone’s financial affairs and understand their tax position.

The Tax Angel can help you with all aspects of personal tax advice and compliance matters. You can feel confident that your tax affairs are in experienced hands. I have an in-depth knowledge of the workings of HM Revenue & Customs (HMRC) gained from many years working in practice and dealing directly with them.

Whether your personal tax affairs are straightforward, or more complex, you need to be confident that you are paying the right amount of tax at the right time, whilst making the best use of all available tax allowances and reliefs.

Being your tax adviser is so much more than simply completing your annual tax return. It’s an ongoing process throughout the year which involves reviewing any changes in the tax rules to make sure that your tax affairs are arranged in the most tax advantageous way.

Do I need to check my PAYE Tax Code?

Simple things like checking your tax code can make all the difference. It can mean that any personal tax issues are identified early and corrected, so that you are not overpaying tax or worse still faced with a tax bill you were not expecting.

Can I claim tax relief on expenses against my employment income?

As an employee you may be able to claim additional personal tax relief on employment expenses or fixed expenses agreed with HMRC. You may even be able to claim personal tax relief for working from home in specific circumstances.

Read more: Claim tax relief for your job expenses: Overview – GOV.UK (www.gov.uk)

How do I claim the marriage allowance?

If you are married or in a civil partnership and your income is less than your personal allowance, you may be able to transfer 10% of your unused personal allowance to your spouse or civil partner, providing they are not a higher rate taxpayer. This can currently save £252 in personal tax per year. The claim can also be backdated for up to 4 years.

Read more: Marriage Allowance: How it works – GOV.UK (www.gov.uk)

When do I start repaying my student loan?

If you are a student, you need to check that you are paying the correct student loan repayments. Although repayments may be deducted from your salary, they will not take into account any other sources of income you may receive, including investment income, rental income, trust income etc. In these circumstances, you may need to complete a personal tax return so that any additional student loan repayments can be assessed and collected by HMRC.

Read more: Repaying your student loan: Overview – GOV.UK (www.gov.uk)

Am I able to claim Child Benefit and when do I need to repay it?

If you are in receipt of child benefit and your income is over £50,000, you should be aware that the child benefit is gradually withdrawn until your income reaches £60,000 when it is completely withdrawn. You may need to complete a personal tax return so that any child benefit can be assessed and collected by HMRC. Pension contributions and charitable gift aid payments can reduce your personal tax and at the same time, the amount of child benefit you may have to repay.

Read more: High Income Child Benefit Charge: Overview – GOV.UK (www.gov.uk)

How do I claim tax relief on charitable donations?

Gift Aid payments are a great way to reduce your overall personal tax liability, whilst at the same time helping a good cause. If you are a taxpayer and you give to a charity using the gift aid scheme, the charity can reclaim basic rate tax on your gift from HMRC. If you are a higher or additional rate taxpayer, you can claim additional tax relief either through your tax code, or through your personal tax return.

Read more:  Tax relief when you donate to a charity: Gift Aid – GOV.UK (www.gov.uk)

Can I claim higher rate tax relief on pension contributions?

If pension contributions are being deducted from your salary each month and you are a higher rate taxpayer, you may be able to claim additional tax relief against your personal tax liability, if you are not already receiving higher rate tax relief at source via your salary. The claim for tax relief can be included on your personal tax return, or if you do not complete one, you may be able to ask HM Revenue & Customs to include a corresponding allowance in your personal tax code.

Read more:  Tax on your private pension contributions: Tax relief – GOV.UK (www.gov.uk)

Will I lose my personal allowance if my income exceeds £100K?

If your income exceeds £100,000, your tax-free personal allowance starts to be withdrawn at a rate of £1 for every £2 of net adjusted income in excess of £100,000. Currently, your personal allowance is withdrawn completely if your net adjusted income currently exceeds £125,140.

There is an anomaly in the personal tax system, which means that if your income is currently between £100,000 and £125,140 (the equivalent of £100,000 plus twice the tax-free personal allowance), you pay an effective 60% personal tax rate. This is because not only do you pay 40% higher rate tax on the additional £2 of income over £100,000, but you also pay 40% on the £1 of personal allowance withdrawn, resulting in a 60% personal tax rate.

With careful planning, it may be possible to reduce your net adjusted income to below £100,000 by claiming tax reliefs, including trading losses, gross gift aid donations and pension contributions. You may also consider transferring investments to your spouse or civil partner.

Read more:  Income Tax rates and Personal Allowances : Income over £100,000 – GOV.UK (www.gov.uk)

How is savings income taxed?

Depending on your other sources of income you may qualify for a 0% starting rate of personal tax on savings income up to £5,000.

There is also a savings allowance which if you are a basic rate taxpayer is £1,000 and if you are a higher rate taxpayer it is £500. Additional rate taxpayers do not however qualify for the savings allowance.

Read more: Tax on savings interest: How much tax you pay – GOV.UK (www.gov.uk)

If you receive dividends, the first £1,000 for 2023/24 are charged to tax at 0%. Dividends within the allowance still count towards your basic and higher rate bands.

Dividends income received in excess of £1,000 are taxed at 8.75% if you are a basic rate taxpayer, 33.75% if you are a higher rate taxpayer and 39.35% if you are an additional rate taxpayer.

The dividend and savings allowances mean that you have to look carefully at the allocation of investments between you and your spouse to maximise the available reliefs.

Read more: Tax on dividends: How dividends are taxed – GOV.UK (www.gov.uk)

What are my tax obligations if move abroad or have foreign income?

Have you ever considered taking up employment overseas or retiring abroad? If so, it is essential that you seek advice to help you fully understand your tax obligations. It is important to understand the rules on return visits to the UK so that you are not unintentionally treated as resident here which may scupper any tax savings you have already achieved to date.

Read more: Tax if you leave the UK to live abroad – GOV.UK (www.gov.uk)

Even if you live in the UK, you may still own property or assets overseas You should be aware of the UK tax treatment, so that any income or gains are correctly declared. The UK has a number of tax treaties with other jurisdictions and these should be consulted as there may be tax reporting requirements in the country where the asset is located.

Who can I help?

The Tax Angel can help with personal tax issues affecting the following:

Please get in touch for a free no obligation chat.

Services I offer

With over 30 years’ personal tax experience working across the North West and North East of England, in both accountancy and law firms, I am well placed to deal with all your personal tax requirements.

Income Tax

PAYE income, expenses, tax codes, overseas issues.

Self Assessment

All aspects of tax return preparation.

Property Tax

Rental accounts, HMRC disclosures, 60-Day CGT returns, SDLT.

Capital Gains Tax

Mitigation, sale of assets, overseas matters, trusts, and estates.

Inheritance Tax

Planning, gifts, exemptions, tax returns, estate registration.

Trusts

Income tax and inheritance tax returns, trust registration, tax advice & planning.

Tax Planning

Income tax, CGT, IHT mitigation, all aspects of trusts, and estates.

HMRC Enquiries

Disclosures, Let Property Campaign, Tax Investigations.