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Higher Rate Tax Payer well timed. Rate Topic: -----

#1 User is offline   AteMoose 

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Posted 22 March 2012 - 07:18 PM

So... this next tax year I become a Higher rate tax payer via PAYE! Um is there anything I need to prepare for? If so do I need to fill in a tax return form and if so what records do I need to keep to fill out my first tax return form?

This post has been edited by AteMoose: 22 March 2012 - 07:22 PM

I have bought a newish (5 years) house in November 2006. I talked the vendor down 30% off peak 2004 price am am paying less than the 2002 price. I feel prices will continue to drop down to the 2001 price but saving for 5 years hopefully means i wont be stung. The price i am paying isn't much above the price the vendor paid for the place when it was new in 2000. However some idiot is trying to flog an identical house on my road for 55k above the price i paid, one month later!?!?! The housing market is frothy, no-one ever knows what the value of a house is, the value is what someone is willing to pay, make sure you pay alot less than the asking price.

Free to collect, like ebay but you dont pay, you just have to collect

QUOTE (sledgehead)If you make a living from something, you are a professional something: it is your profession. You could bake dog turds and flog them as ornaments. If that's how you make your living, you ARE a professional dog-turd baker. Period
QUOTE (Rolling Stone 13th July 2000)The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

QUOTE (Soon Not a Chain Retailer @ Aug 30 2009, 01:03 AM) Society should provide trampolines not safety nets.

QUOTE (GordonBrown Jan 27 2008 (warning about the coming inflation?))if you don't get the skills you wont get a job
if you get the skills you will earn ALOT of money

#2 User is offline   Bossybabe 

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Posted 22 March 2012 - 07:22 PM

View PostAteMoose, on 22 March 2012 - 07:18 PM, said:

So... this next tax year I become a Higher rate tax payer! Um is there anything I need to prepare for? If so do I need to fill in a tax return form and if so what records do I need to keep to fill out my first tax return form?


Don't worry. They always find you.

A friend of mine had a demand for 21k from HMRC last week. Her pension is just 11k. HMRC caved in when she phoned to complain.
QUOTES:

  • "This is going to hurt you much more than it will hurt me." - Bossybabe
  • "I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones." - Albert Einstein.
  • "This fellow is wise enough to play the fool, and to do that well craves a kind of wit. He must observe their mood on whom he jests, The quality of persons, and the time" VIOLA, Twelfth Night, William Shakespeare
  • "Oh, when she's angry, she is keen and shrewd! She was a vixen when she went to school. And though she be but little, she is fierce." - HELENA, A Midsummer Night's Dream, William Shakespeare

#3 User is offline   AteMoose 

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Posted 22 March 2012 - 07:27 PM

Um.... that doesn't sound good would rather be proactive! Could I pay more money into a pension to avoid paying the extra tax and having the hastle of filling in a tax return?
I have bought a newish (5 years) house in November 2006. I talked the vendor down 30% off peak 2004 price am am paying less than the 2002 price. I feel prices will continue to drop down to the 2001 price but saving for 5 years hopefully means i wont be stung. The price i am paying isn't much above the price the vendor paid for the place when it was new in 2000. However some idiot is trying to flog an identical house on my road for 55k above the price i paid, one month later!?!?! The housing market is frothy, no-one ever knows what the value of a house is, the value is what someone is willing to pay, make sure you pay alot less than the asking price.

Free to collect, like ebay but you dont pay, you just have to collect

QUOTE (sledgehead)If you make a living from something, you are a professional something: it is your profession. You could bake dog turds and flog them as ornaments. If that's how you make your living, you ARE a professional dog-turd baker. Period
QUOTE (Rolling Stone 13th July 2000)The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

QUOTE (Soon Not a Chain Retailer @ Aug 30 2009, 01:03 AM) Society should provide trampolines not safety nets.

QUOTE (GordonBrown Jan 27 2008 (warning about the coming inflation?))if you don't get the skills you wont get a job
if you get the skills you will earn ALOT of money

#4 User is offline   Georgia O'Keeffe 

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Posted 22 March 2012 - 07:28 PM

View PostAteMoose, on 22 March 2012 - 07:27 PM, said:

Um.... that doesn't sound good would rather be proactive! Could I pay more money into a pension to avoid paying the extra tax and having the hastle of filling in a tax return?

Youre part of the A team now, whats not to love?

#5 User is offline   scottbeard 

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Posted 22 March 2012 - 07:32 PM

View PostAteMoose, on 22 March 2012 - 07:18 PM, said:

So... this next tax year I become a Higher rate tax payer via PAYE! Um is there anything I need to prepare for? If so do I need to fill in a tax return form and if so what records do I need to keep to fill out my first tax return form?


Mostly there's no change if you're employed as they collect it all via PAYE.

However, strictly as a 40% tax payer you should be paying tax on 40% on bank interest (except of course ISAs which are tax free) which means you should fill in a tax return, although if your interest income is small HMRC may not be bothered. You should hold onto the summary page your bank sends at the end of each tax year detailing interest and tax paid anyway.

On the plus side, you may WANT to fill in a tax return, as you now get extra tax relief on gift aid donations and contributions to personal pensions, so keep a record of donations and pension contributions (although if your pension contributions are just deducted from your pre-tax earnings there's no change).

[Disclaimer - i'm no tax advisor, just telling you what I believe to be true]
"A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain." Mark Twain

#6 User is offline   scottbeard 

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Posted 22 March 2012 - 07:33 PM

View PostAteMoose, on 22 March 2012 - 07:27 PM, said:

Um.... that doesn't sound good would rather be proactive! Could I pay more money into a pension to avoid paying the extra tax and having the hastle of filling in a tax return?


Yes - but best to do it into your work scheme where contributions can be deducted from pre-tax income.

If you pay into a personal pension, you'll have to claim relief via self assessment.
"A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain." Mark Twain

#7 User is offline   scottbeard 

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Posted 22 March 2012 - 07:34 PM

View PostBossybabe, on 22 March 2012 - 07:22 PM, said:

Don't worry. They always find you.


Not necessarily.

But you're in trouble if you've amassed a big bill and then they do. Ask Rangers FC.
"A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain." Mark Twain

#8 User is offline   buckers 

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Posted 22 March 2012 - 07:40 PM

You could ask for reduced hours for the same money instead to keep you under the threshold? No-one on their deathbed ever says that they wished they'd spent more time at the office.
Buckers
IO, IO, it's off to work they go.....

#9 User is offline   AteMoose 

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Posted 22 March 2012 - 07:44 PM

ok so Im worrying about nothing thats good news :) carry on as normal for now, and increase pension contributions.
I have bought a newish (5 years) house in November 2006. I talked the vendor down 30% off peak 2004 price am am paying less than the 2002 price. I feel prices will continue to drop down to the 2001 price but saving for 5 years hopefully means i wont be stung. The price i am paying isn't much above the price the vendor paid for the place when it was new in 2000. However some idiot is trying to flog an identical house on my road for 55k above the price i paid, one month later!?!?! The housing market is frothy, no-one ever knows what the value of a house is, the value is what someone is willing to pay, make sure you pay alot less than the asking price.

Free to collect, like ebay but you dont pay, you just have to collect

QUOTE (sledgehead)If you make a living from something, you are a professional something: it is your profession. You could bake dog turds and flog them as ornaments. If that's how you make your living, you ARE a professional dog-turd baker. Period
QUOTE (Rolling Stone 13th July 2000)The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

QUOTE (Soon Not a Chain Retailer @ Aug 30 2009, 01:03 AM) Society should provide trampolines not safety nets.

QUOTE (GordonBrown Jan 27 2008 (warning about the coming inflation?))if you don't get the skills you wont get a job
if you get the skills you will earn ALOT of money

#10 User is offline   hotairmail 

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Posted 22 March 2012 - 08:01 PM

View PostAteMoose, on 22 March 2012 - 07:27 PM, said:

Um.... that doesn't sound good would rather be proactive! Could I pay more money into a pension to avoid paying the extra tax and having the hastle of filling in a tax return?


You can pay extra money in to avoid the higher rate. Not sure about the tax return bit.

It's not that hard once you've done a three year part-time course at the local tech on evenings to try and work it all out.


#11 User is offline   schmunk 

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Posted 23 March 2012 - 01:43 PM

You don't need to do anything.

Your bank tells HMRC about your bank interest and your PAYE coding will be amended to collect any tax you owe from your bank interest.

You do not need to file tax returns (unless you have another reason for doing so).

If you are making Gift Aid payments and want to claim tax relief, you can call HMRC and ask for them to be coded into your PAYE coding. HMRC may ask you to file tax returns if you do this.

(I am a tax advisor).

#12 User is offline   longtomsilver 

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Posted 23 March 2012 - 03:27 PM

View PostAteMoose, on 22 March 2012 - 07:18 PM, said:

So... this next tax year I become a Higher rate tax payer via PAYE! Um is there anything I need to prepare for? If so do I need to fill in a tax return form and if so what records do I need to keep to fill out my first tax return form?


My OH is in the higher rate bracket and has been for quite some time. Also via PAYE not yet been asked to fill in a tax return yet.

She has just upped her pension contribution from 3% of gross salary to 6% to start from April 1st and the company adds a further 9%. Regardless of being a higher rate tax payer she'd be silly not to.

Still a fair amount above the threshold we are planning to chuck another xx,xxx into a SIPP to get us under the threshold so we don't lose our child benefit.
10 years ago we had Steve Jobs, Bob Hope and Johnny Cash - Now we have no Jobs, no Hope and no Cash So, what left? Alcohol.

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"the world seems a better place when you're wearing beer goggles".

Quote buried in same article from 27 year old female subject painting the town of Cardiff red on a booze fuelled night out.

#13 User is offline   bearwithasorehead 

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Posted 23 March 2012 - 05:38 PM

This happened to me this year too.
Anyone know about share dividends outside an ISA.
Do I need to fill out a return to declare this?

#14 User is offline   spord 

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Posted 24 March 2012 - 07:49 AM

I was under the inpression that anyone earning over the higher rate threshold had to do a self assessment return. I do, but then I run a partnership as well as being employed full time, so that's probably why.

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