Tax On Overall Income

[Bazile]

You've been paid  amounts related  to your pension ,( in addition to your monthly pension )all of  which had tax deducted at the basic rate .

Your wages has also had tax deducted at the basic rate

However , overall all  the above added together , pre tax ,take you into the next tax band , for the financial year .

How is tax then dealt with ?

 

[davebro3]

You should get an assessment or calculation showing tax underpaid & this will be recovered by adjustment to your PAYE tax code(s) for a subsequent year.

[Bazile]

Will HMRC also be aware of any dividends / savings interest and add  that to the overall amount to be taxed ?

[Peter Pedant]

er because ifyou have multiple sources of income then you MAY (I say you have to) have to fill out a form

and the calc is straighforward

add income up - knock off year's allowance and tax already paid

if there is a remainder - tax  the first £35000 ( or whatever it is for that year ) at 2-% and the excess ( marginal) at 40 %

simples

[Peter Pedant]

savings ( not taxed but interest MAY be)

divis - no you MUST declare them if you think tax is payable

do not play fooly with a taxman! ( see Boris Becker)

[davebro3]

Banks etc. should notify HMRC of an untaxed interest you receive. You are supposed to report yourself any dividend income which should be taxed at the higher rate.

[Peter Pedant]

ou are supposed to report yourself any dividend income which should be taxed at the higher rate.

nay nichty nochty Dave - MUST

required by law - automatic fine£100.

[Bazile]

Thanks both - but you both seem to be contradicting each other .

Anyone else ?

[DDIL]

It is ultimately your responsibility to ensure HMRC has all the correct information.

[newmodarmy]

There is an online form for reclaimimg overpaid tax. I used it for my wife and it worked well.

[Peter Pedant]

yes of course we are

you dont need to be paying any taax at all - lie back and spend it all of it! -is that um clear enough ?

[Peter Pedant]

but you both seem to be contradicting each other . No - Play fooly with the taxman!

 

It is  your responsibility to ensure HMRC has all the correct information.

voice of reason at last

[Bazile]

I'm trying to make sure I pay  what is due .

To that end I'm trying to ascertain what the rules and what I need to do .

Therefore is it the case that HMRC will be aware of what I've earned in wages / savings interest / pension payments / dividends and will therefore send me an assessment to recover any underpayments ?

Or do I have to tell them in the first instance myself my overall income  by completing whatever forms .

This is the first year that I may receive income from whatever sources that takes me out of the basic tax rate band and into the next band up 

[DDIL]

It doesn't matter if they get their information from other sources it is still your responsibility to ensure they have the right information.

so either ring them or chat type with them

[davebro3]

They should have everything they need except your dividend income. If you report that & let them get on with it you should be in the clear.

(Their website says to report Div income over £2000 but I'm sure there will be tax to pay on lesser amounts if you are higher rate.)

[Peter Pedant]

To that end I'm trying to ascertain what the rules and what I need to do .

you have been told. Tou have  given the usual AB discalimer "X says A. And Y says not-A, so  I really dont know WHAT to do!" as if that really answers anything

AND

is it the case that HMRC will be aware of what I've earned in wages / savings interest /

is irrelevant to the known duty that you must inform the txman if you think you owetax (which clearly you do)

I mean try it and see- fooly with taxman !

I had to make anajustment to  a taxform( 2012 in 2023) volunatry declaration - I had not paid £600 on a landtransfer ( my ickl bit)

I forgot = negligence in taxlaw - penalty.£200 - 

and lawyers fees £3000.

My mudduz lawyers fees( I learnt ! I learnt ! honeslty) were £10 000 ( 1995) on tax unpaid of £847.00

honestly fooly with the taxman at your peril _ I know this is a very difficult concept

[THECORBYLOON]

The allowance from dividends was £2,000 but it dropped to £1,000 in the 2023/24 tax year and dropped again, to £500 for the current tax year, 2024/25.

https://www.gov.uk/tax-on-dividends

[THECORBYLOON]

From that same link, the tax rate on dividends depends on your personal tax band,

Basic 8.75% 

Higher 33.75%

Additional 39.35%

[davebro3]

it still says £2000 to be reported on their website

[davebro3]

maybe they failed to update it?

[DocHH]

I suggest you fill in whatever forms are necessary. I believe while your pension providers and employer, may have reported what they have paid you and tax deducted, interest and dividend payments may also have been reported to HMRC, I doubt if they aggregate every thing from that information to calculate tax under or overpaid. It is my understanding it is your responsibility to report all the figures appropriately, HMRC then do the calculations based on those.