Taxation ...and the taxman....
Well, now that we have departed from the serious stuff, Beags' remark reminds me of a wonderful gypsy-esque character who reckoned he had the Revenue sorted. His real liability was probably enormous, and his ploy was to drop from time to time into any tax office, as a scruffy old man, and offer them a tenner 'in case they needed it'.
They were of course obliged to accept and record these payments, which he considered not only to throw their system into complete confusion but also to reflect him as a cooperative taxpayer.
His scheme seems pretty close to that described by the late Prof. C. N. Parkinson as 'the Chinese system of tax evasion' (in his splendid book 'Parkinson's Law', where 50 years ago he was busy predicting, inter alia, that the RN was going to end up with more admirals than ships).
The 'Chinese system' depended on an appreciation of the bureaucratic cycle time, and corresponding at intervals to ensure that your file remained near the bottom of the pile. With the Revenue's current prowess in mastering the joys of IT .... could be a very long cycle time.
They were of course obliged to accept and record these payments, which he considered not only to throw their system into complete confusion but also to reflect him as a cooperative taxpayer.
His scheme seems pretty close to that described by the late Prof. C. N. Parkinson as 'the Chinese system of tax evasion' (in his splendid book 'Parkinson's Law', where 50 years ago he was busy predicting, inter alia, that the RN was going to end up with more admirals than ships).
The 'Chinese system' depended on an appreciation of the bureaucratic cycle time, and corresponding at intervals to ensure that your file remained near the bottom of the pile. With the Revenue's current prowess in mastering the joys of IT .... could be a very long cycle time.
I don't own this space under my name. I should have leased it while I still could
And on evading the odure, I heard this from a reliable source, a former Lightning pilot and Red Arrow.
It is how to avoid 3 points on your licence.
You get the usual plus £60 fine. You immediately send them a cheque for £61 or some such. They are then obliged to send you the cheque back or refund the pound. If they refund the pound then DO NOT CASH the cheque. If they return the cheque simply post it back again.
While your file remains open they do not put the points on your licence.
warning: I haven't tried this and know no one who has
It is how to avoid 3 points on your licence.
You get the usual plus £60 fine. You immediately send them a cheque for £61 or some such. They are then obliged to send you the cheque back or refund the pound. If they refund the pound then DO NOT CASH the cheque. If they return the cheque simply post it back again.
While your file remains open they do not put the points on your licence.
warning: I haven't tried this and know no one who has
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Yeah ok PN, I wish you luck with this one.....
I'd just drive so I don't get 3 points. (hint) the cameras are big, yellow and you can get the location from t'interweb
I'd just drive so I don't get 3 points. (hint) the cameras are big, yellow and you can get the location from t'interweb
I don't own this space under my name. I should have leased it while I still could
However you are wrong about the cameras.
Since 2007 cameras no longer need to be painted yellow so you need to be more careful even if you do know where they are. Of course in Scotland they are different again.
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I would also point out that Lincs police have a number of 'Talivans' that have been quite evident in the county over the last few days.
Bloody outrage, they should be stopping the zombies driving, not picking on honest folk who choose to travel from A to B in a time shorter than that which has arbitrarily decided.
Bloody outrage, they should be stopping the zombies driving, not picking on honest folk who choose to travel from A to B in a time shorter than that which has arbitrarily decided.
Just to return to the tax issue ...
My pension was assessed and split following my divorce. Our fine and competent pension providers failed to notify me of the change in pension until some seven months AFTER initiating it. Result - overpayment! Much fairly 'lively' correspondence evetually produced agreement that repayment would be made over approximately three years. The repayment is deducted at source (so I never get my hands on it ) and the remainder is at a level LESS than the tax deducted!!! Never have understood financial matters and have no particular wish to, but I have a feeling that I am being 'shafted'. When the original overpayment was made, that money was taxed at source. The amount being repaid is (as I see it) money that I am NOT RECEIVING. Should one be taxed on money which does not accrue to one???
Puzzled, Norfolk
My pension was assessed and split following my divorce. Our fine and competent pension providers failed to notify me of the change in pension until some seven months AFTER initiating it. Result - overpayment! Much fairly 'lively' correspondence evetually produced agreement that repayment would be made over approximately three years. The repayment is deducted at source (so I never get my hands on it ) and the remainder is at a level LESS than the tax deducted!!! Never have understood financial matters and have no particular wish to, but I have a feeling that I am being 'shafted'. When the original overpayment was made, that money was taxed at source. The amount being repaid is (as I see it) money that I am NOT RECEIVING. Should one be taxed on money which does not accrue to one???
Puzzled, Norfolk
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Tax Codes, and Self Assessment, etc
There was a bit of a fuss about six months ago, when HMRC sent out new tax codes generated by their super new computer system... the one with the little wooden balls that slide along the wire frame... you know, they come from the Early Learning Centre...
According to my new coding, my (pension), income suddenly had propelled me into the 50% tax bracket... if only... per what others have said, I found that a polite and patient telephone call can be rewarding. It transpired that, in transferring the data to their new system, they had pulled across a corrupted file of my pension details, corrupted as to its name, but not as to its payments, and saved it about three times so that their system thought I was getting multiple pensions...
I do all my (and the Mehmsahib's), tax using the on-line system. It's pretty straight forward, provided one works one's way through it step by step. I have already 'done' the return on an Excel spreadsheet, and, at each step of entering data into the on-line system, I get it to calculate the tax owed, and check it against my spreadsheet. That way, if I make a mess up, I know where it is likely to be. The help desk people really are, if you ring them up and ask where stuff is supposed to go. And a big advantage of doing it on-line is that if one is owed money by HMRC (as the Mehmsahib sometimes is), then it appears in one's bank account within a few days of clicking the send button...
For the few folk with pensions originating overseas, remember that you pay tax only on 90% of the income...
And keep meticulous records... AFAIK, they are entitled to ask you up to seven years back...
And... I didn’t realise that thegypsy was Korean... he didn't confess to that the last time I was in touch with him...
According to my new coding, my (pension), income suddenly had propelled me into the 50% tax bracket... if only... per what others have said, I found that a polite and patient telephone call can be rewarding. It transpired that, in transferring the data to their new system, they had pulled across a corrupted file of my pension details, corrupted as to its name, but not as to its payments, and saved it about three times so that their system thought I was getting multiple pensions...
I do all my (and the Mehmsahib's), tax using the on-line system. It's pretty straight forward, provided one works one's way through it step by step. I have already 'done' the return on an Excel spreadsheet, and, at each step of entering data into the on-line system, I get it to calculate the tax owed, and check it against my spreadsheet. That way, if I make a mess up, I know where it is likely to be. The help desk people really are, if you ring them up and ask where stuff is supposed to go. And a big advantage of doing it on-line is that if one is owed money by HMRC (as the Mehmsahib sometimes is), then it appears in one's bank account within a few days of clicking the send button...
For the few folk with pensions originating overseas, remember that you pay tax only on 90% of the income...
And keep meticulous records... AFAIK, they are entitled to ask you up to seven years back...
And... I didn’t realise that thegypsy was Korean... he didn't confess to that the last time I was in touch with him...
Jack, strong smell of rat there. If your pension provider is deducting tax at source, they must only do it once on the same money.
To put it another way, if they are calling back money on which you have already paid tax (=had deducted), they should have credited the tax deducted on the clawback against that deductible on your current pension payments. (Any tax liability on the clawback, presumably, now devolves to your ex and is not now your problem).
I can't be sure without seeing the numbers but if this is the case, possibly the numpties at your provider are not quite up to the job, yet could perhaps sort things properly and fairly easily given a little friendly enlightenment from your end.
Otherwise, you can ultimately claim any overpaid tax back fom HMRC, but that is more paperwork and (I say again) if you have good records to hand that is a huge advantage in sorting things.
Please sing out if you need a hand on this one, per PM.
To put it another way, if they are calling back money on which you have already paid tax (=had deducted), they should have credited the tax deducted on the clawback against that deductible on your current pension payments. (Any tax liability on the clawback, presumably, now devolves to your ex and is not now your problem).
I can't be sure without seeing the numbers but if this is the case, possibly the numpties at your provider are not quite up to the job, yet could perhaps sort things properly and fairly easily given a little friendly enlightenment from your end.
Otherwise, you can ultimately claim any overpaid tax back fom HMRC, but that is more paperwork and (I say again) if you have good records to hand that is a huge advantage in sorting things.
Please sing out if you need a hand on this one, per PM.
Dogie - thank you for your input. I won't, for the moment, take advantage of your kind offer but greatly appreciate it.
My problem is that I have never understood tax/financial affairs and while I can cope with the on-line self assessment process, I have NEVER (in spite of being reasonably numerate) managed to produce the same results as HMRC. Their wooden balls/abacus probably operates with different software
My last S/A generated THREE responses from different areas of the HMRC empire all giving different tax codes and assessments and a final one saying that I didn't need to do a S/A in future I think that, perhaps, my first port of call should be the local Tax Office and see if I/they can make sense of what is happening. Unfortunately my head starts to hurt at the thought
If I manage to brace myself sufficiently for the fray, I shall report back
My problem is that I have never understood tax/financial affairs and while I can cope with the on-line self assessment process, I have NEVER (in spite of being reasonably numerate) managed to produce the same results as HMRC. Their wooden balls/abacus probably operates with different software
My last S/A generated THREE responses from different areas of the HMRC empire all giving different tax codes and assessments and a final one saying that I didn't need to do a S/A in future
I think that, perhaps, my first port of call should be the local Tax Office and see if I/they can make sense of what is happening. Unfortunately my head starts to hurt at the thought If I manage to brace myself sufficiently for the fray, I shall report back
The point has been made many times in these pages that automation is all very fine save when it keeps you in the dark and, if you have failed to maintain your hand skills, drops you deep in the dark Brown stuff when it screws up. The very simple hand calculation shown on p.TRG24 of the UK Tax Return Guide gives, within its stated limitations, a good, quick and easy feel for your tax situation; better still, it helps to demystify the whole business if you are fearful of, or unaccustomed to, doing your own tax calculations.
Tax on overseas income : Directgov - Money, tax and benefits
Amount of pension income charged to tax
For the few folk with pensions originating overseas, remember that you pay tax only on 90% of the income...
Top marks, GemDeveloper, and thanks! ( I'm looking forward to joining that few ).
Given the membership of this forum, it may be a biggish few ..... so for quite a good synopsis of UK wrinkles for us 'migrants' of various sorts:-
Tax on overseas income : Directgov - Money, tax and benefits
and for HMRCs nitty-gritty on pensions inbound from foreign:-
Another pensions matter - if a pension award is delayed or backdated across a UK tax year end you may insist on being taxed on it on the 'accruing' basis, i.e. when you were entitled to it, rather than when it finally arrived. This can save a packet for someone who has e.g. landed a retirement job in the tax year when the delayed payment is made:-
Amount of pension income charged to tax
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dogle
Top marks, GemDeveloper, and thanks! ( I'm looking forward to joining that few ).
Thank you kindly, Sir, he said...
One other thing that may be helpful for those who have a combination of a U.K. pension, on which you'll be taxed at source, and a foreign pension, which you will receive gross. Of course, you have to pay U.K. tax on (90% of), your foreign pension, but...
... your Tax Office may try to take that tax off you by adjusting your Tax Code so that the PAYE on your U.K. pension effectively mops up the tax on your foreign pension. You can agree to that if that makes your life easier, but you don't have to agree. You can opt to pay the additional tax in two instalments. These are due on 31 January of the Tax Year, and 31 July following the end of the Tax Year, concerned, although the first time that you do a Self Assessment, one only has to pay by 31 January following the end of the Tax Year. Once one has settled into a 'steady state' routine, and so one's incomes are fairly predictable, then estimating the amount is relatively easy, and the on-line self assessment will calculate an amount, based on your previous year's income and tax position, for a Payment on Account in January following the end of the tax year.
Paying as two instalments means that you keep the cash in your interest bearing account for as long as is reasonably possible. And... another tip... paying on-line using your debit card is very straight forward, and it has the advantage that you know that they've got the money... so, within reason, you can pay almost at the last minute. I have a colleague whose cheque to HMRC was stolen in the post, and thus never received by them. Fortunately, he noticed that it hadn’t been cashed, rang the Help Line, and they were very sympathetic, as his wasn’t the only one, of course, and they didn’t penalise him for a late payment.
If you end up owing a little more one year than the two Payments on Account have taken, perhaps 'cos of a pension increase (what?), then that's fine. But if you have a windfall in a particular year (so, for example, a Life Policy matures and you cash it in, thus generating a chargeable event), you will pay more tax in that year, and the system tends to assume that you will be getting the same income in the following year, and thus calculates your half yearly payments as being more that they will actually be when you do the Return. You can reduce the amount of a Payment on Account... but if you over-egg the reduction, then they charge you interest on the difference.
Hope that all helps.
Last edited by GemDeveloper; 13th Nov 2010 at 09:20. Reason: Added a phrase for clarity (clarity? Hmmm...)
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Lots of useful tips as to how to avoid overpaying tax to a bloated Governmental System. Surely the thing to do is change the system.
The US "PARLIAMENT" has 100 Senators and 435 Representatives to represent a population of 308 million - whilst the UK Parliament has 650 MPs and 777 voting Lords for a population of 61 million .
Time for a cull?
The US "PARLIAMENT" has 100 Senators and 435 Representatives to represent a population of 308 million - whilst the UK Parliament has 650 MPs and 777 voting Lords for a population of 61 million .
Time for a cull?
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cazatou
Lots of useful tips as to how to avoid overpaying tax to a bloated Governmental System. Surely the thing to do is change the system.
I could have written 'one of the unintended consequences of all the fiddling around the edges'... but I am sufficiently old and grey and cynical to imagine that it was all done with the full knowledge that there would be still more Government employment created, with incumbents who would vote for the Government who employed them...
Whilst it might, as a headline, be a very unpopular move, I do sometimes wish that some party would have the courage to say: "Right, we are going to stop all these complex bits and pieces, raise the basic rate of income tax, and we'll halve the number of Civil Servants that you are paying to administer it." I realise that this would be a tough message for the HMRC, etc., staff, who, as we have all agreed, are very decent and helpful folk, but how long can we go on paying for such complexity? And, it's only a short time ago that the basic rate was 25%... and yet everyone expects more from the Health Service, people are living longer and so drawing pensions for longer, and so we have to scrap the Harrier Force, decommission the Ark, and put the Prince of Wales into mothballs before we get any use out of it (the carrier, not King Designate).
Sorry, Mods, rant over. I'll just go and lie down in a darkened room for a bit...
