Tax - TSR guide and questions thread

OP

Mitch92uK

647L is the code on my payslip. I don't think I received the money back?
I do have a copy of my P60.

You wouldn't have received a rerund as a separate payment. It would have been included as part of your pay 'packet' the first time that you were paid after your code was corrected. What does your P60 show for tax deducted in the year?

Reply 101

Illusionary

There are circumstances when this could happen, yes, but I wouldn't recommend relying on this. For a start, if the company has any assets, these will likely be used to cover the penalty before you can have any claim on them (assuming that this is your company). For the sake of £100, it's not really worth having a company insolvency to your name.

we have no assets, we have like 7 quid left in the bank

Reply 102

Mitch92uK

2

Illusionary

You wouldn't have received a rerund as a separate payment. It would have been included as part of your pay 'packet' the first time that you were paid after your code was corrected. What does your P60 show for tax deducted in the year?

P60 shows no tax deducted for the year. Does this mean I have already been paid it?

Reply 103

OP

Mitch92uK

P60 shows no tax deducted for the year. Does this mean I have already been paid it?

Pretty much, yes. For a bit more certainty, check your first payslip that had the correct tax code - you should see the refund shown there.

Reply 104

OP

tinktinktinkerbell

we have no assets, we have like 7 quid left in the bank

Beyond what I've said already, I don't feel comfortable advising you on how to avoid paying a penalty (and any tax that would have been on the return) that is legitimately due. Suffice to say, I strongly recommend just paying the fine then winding up the company at that point.

As a final point though, I assume that you are sure that a penalty will be due? Corporation tax returns are in most cases due 12 months after the end of the 'accounting period', which is usually the same as the period for which accounts are drawn up. This is a significant difference from Income Tax returns, which are due by 31 January after the end of the 'tax year'.

Reply 105

Illusionary

Beyond what I've said already, I don't feel comfortable advising you on how to avoid paying a penalty (and any tax that would have been on the return) that is legitimately due. Suffice to say, I strongly recommend just paying the fine then winding up the company at that point.

As a final point though, I assume that you are sure that a penalty will be due? Corporation tax returns are in most cases due 12 months after the end of the 'accounting period', which is usually the same as the period for which accounts are drawn up. This is a significant difference from Income Tax returns, which are due by 31 January after the end of the 'tax year'.

we cant afford to pay the fine and tbh its not our fault we got it in the first place

basically we registered to do our tax returns on line, me and my partner managed to complete the personal ones fine but when it came to the partnership one we found we couldnt do it online, no one told us this and its our first time doing tax returns so we phoned up to be told we had to use one of the software forms on the site, the cheapest being £175 told them we couldnt afford to pay that and the bloke on the phone said that we could send the forms in and we wouldnt be liable for a late penalty

we wont have any tax to pay

Reply 106

OP

tinktinktinkerbell

we cant afford to pay the fine and tbh its not our fault we got it in the first place

basically we registered to do our tax returns on line, me and my partner managed to complete the personal ones fine but when it came to the partnership one we found we couldnt do it online, no one told us this and its our first time doing tax returns so we phoned up to be told we had to use one of the software forms on the site, the cheapest being £175 told them we couldnt afford to pay that and the bloke on the phone said that we could send the forms in and we wouldnt be liable for a late penalty

we wont have any tax to pay

Okay, there's perhaps some hope. I'm not sure the significance of a partnership here - a partnership is a quite different entity from a company, and doesn't pay tax itself. You'll need to go into more detail on the structure that you've got for me to be able to advise on that.

However, HMRC will sometimes waive a penalty if you have a 'reasonable excuse', though what would qualify as 'reasonable' will depend on the circumstances - you'd need to speak to your tax office about this (see here for examples). "We can't afford to" won't on it's own be a valid excuse, though, I'm afraid.

Reply 107

Illusionary

Okay, there's perhaps some hope. I'm not sure the significance of a partnership here - a partnership is a quite different entity from a company, and doesn't pay tax itself. You'll need to go into more detail on the structure that you've got for me to be able to advise on that.

However, HMRC will sometimes waive a penalty if you have a 'reasonable excuse', though what would qualify as 'reasonable' will depend on the circumstances - you'd need to speak to your tax office about this (see here for examples). "We can't afford to" won't on it's own be a valid excuse, though, I'm afraid.

oh no we wont say we cant afford to but we will say that we didnt know the forms couldnt be done online and that the guy on the phone told us we wouldnt face a penalty, apparently its happened to a lot of other people aswell

what other information do you need?

Reply 108

OP

tinktinktinkerbell

oh no we wont say we cant afford to but we will say that we didnt know the forms couldnt be done online and that the guy on the phone told us we wouldnt face a penalty, apparently its happened to a lot of other people aswell

what other information do you need?

The penalty position should be fairly similar if you have to make a partnership return and/or Income Tax return. I was just surprised to see you mention a partnership as if there is a partnership involved as well as a company then you've got a structure that's more complex than I would have expected (not that there's necessarily anything wrong with that). If you've been informed by a representative from your tax office that you shouldn't have to pay a penalty, then use this to back up any argument that you might have to make for 'reasonable excuse', ideally giving a name if you kept a record of that.

Reply 109

hypocriticaljap

2

tinktinktinkerbell

we have no assets, we have like 7 quid left in the bank

are you the owners of Portsmouth football club?

Reply 110

hypocriticaljap

are you the owners of Portsmouth football club?

no

Reply 111

Hi, in the current tax year I've been a student, on JSA and since January working full time. So in the tax year I will have earned less than the tax free allowance but I'm paying tax on my earnings. How do I go about claiming this back, and do I have to wait until the tax year is over? Also, I started work with a few other people, and a couple of them in similar situations haven't paid tax on there earnings, could I do something to get onto that and not have to claim it back?

Thanks

Mike

Reply 112

Also, my tax code is 647L NONCU - am I right in thinking that means I'm being ****** in the arse?

Reply 113

OP

MikeSmith

Hi, in the current tax year I've been a student, on JSA and since January working full time. So in the tax year I will have earned less than the tax free allowance but I'm paying tax on my earnings. How do I go about claiming this back, and do I have to wait until the tax year is over? Also, I started work with a few other people, and a couple of them in similar situations haven't paid tax on there earnings, could I do something to get onto that and not have to claim it back?

Thanks

Mike

You'll find all of the answers in my wiki guide to Income Tax and National Insurance, here. :smile:

However, to summarise:

•

Being a student has no effect on whether you should be paying Income Tax (or National Insurance).

•

If you've overpaid Income Tax but you're currently employed then you're probably on the wrong tax code. Does your payslip show a code of "BR"? If so, get in touch with your tax office (contact details here) to get this corrected as it's probably incorrect if you only have one job. They'll probably suggest that you complete a form P46 and give this to your employer. Once this is processed, you'll receive any refund that you're due through the payroll system.

•

Once you're on the correct tax code, many of the situations that result in you paying tax and having to reclaim later will not arise.

See my article for more detail, but if anything's unclear after you've looked at it feel free to ask. :smile:

Reply 114

OP

MikeSmith

Also, my tax code is 647L NONCU - am I right in thinking that means I'm being ****** in the arse?

Okay, I didn't see this when first replying. Normally, the 'Pay As You Earn' (PAYE) system that is used to collect Income Tax and National Insurance from employees will automatically correct your total tax deductions for the year each time that you're paid. However, this is a 'non-cumulative' code, which means that this auto-correction will not apply and instead each pay period will be looked at separately, receiving ¹/₅₂ (if paid weekly) or ¹/₁₂ (if paid monthly) of the standard tax-free 'personal allowance' of £6,475.

The solution to this remains as above, however - a quick call to your tax office should be the starting point. :smile:

Reply 115

Thanks, and sorry I missed your sticky.

BTW, will I be able to just tell them via the form that I won't be making enough to pay tax during this tax year? I got about £2000 in JSA and will have earned around £3700 by April 5th from my current employment.

Reply 116

Thanks, just saw your 2nd reply.

Reply 117

OP

MikeSmith

Thanks, and sorry I missed your sticky.

BTW, will I be able to just tell them via the form that I won't be making enough to pay tax during this tax year? I got about £2000 in JSA and will have earned around £3700 by April 5th from my current employment.

In itself, the P46 doesn't have anywhere to put specific details of previous earnings. In fact, as you've previously been in receipt of JSA during the year the standard procedure would be for your employer to use a non-cumulative code rather than the standard cumulative code (which would be just "647L[noparse]")[/noparse]. The tax office should be able to sort this for you, however, by sending a notice of coding to your employer.

Even in the worst case, though, you can still claim back any overpayment at the end of the tax year by writing to your tax office with a copy of your P45 or P60. :smile:

Reply 118

Mmm, oops. Just noticed I still have P45 Part 2 (Copy for new employer) and P45 Part 3 (For completion by new employer). I handed something in just after I started work, and wasn't asked for anything else. Should I have handed these in too? :confused:

Reply 119

OP