Tax related bafflement...

[Emily-Elizabeth]

Right, this is the first year I am having to do all the income tax paying bit. I have had to say, I am not enjoying it very much - but I have come to accept that I am going to have to get used to it.

I got a letter today from HM Revenue and Customs and I am confused as to what it means :confused:

Savings in bank and building societies

Do you need to pay tax on your interest?

You may have to pay tax this year because you now have

- a pension' date=' or

- a job, or

-Social Security Benefits

If you do, you will have to pay tax on the interest you get from money saved in your bank or building society accounts

blah blah blah....[/quote']

What does this all mean? I though I paid income tax bit came out before the money that is paid in my bank. I am not claiming my pension (I am 19 ffs) and I had any govenment benefits since the ones my mum got for having a child (she called them her wages for keeping me)

Can I ignore this letter? Does everyone get one?

Last time I ignored a letter like this it came back and bit me in glutious maximums, it would see that from NIC terms contribution is not that same as volenterry:rolleyes:

Thanks all, saves me from spending my lunch time on the phone to the tax man on monday

[Dr Zoidberg]

Most bank accounts deduct tax from your interest as it's earned.

Just check that yours does this then bin the letter.

Even if it doesn't , unless you have thousands of pounds in the bank the amounts involved are tiny

[heresmo]

Hi E-E

I'm not an expert so please await better info to arrive.

I reckon you'll have got that letter because you have recently started work. If you've not previously been issued with a tax code, your employer will deduct tax automatically from your pay (as we all have to pay tax) and this is a sorting-out letter methinks to get the deductions right - so don't ignore the letter and ask your employer how they are adjusting your pay.

Give them the info they seek, e.g. if you have savings in an account, you should have been asking for the interest not to be taxed as you ere not earning an income so tax wouldn't apply (though now it does). Check whether you have had tax deducted from any interest on savings you have, as you ought to be able to claim that tax back, if you fill in the right forms of course.

IOW You are now a person who should be paying tax. Who's your employer? Either your agency employs you or the CPS if you're on a direct contract. Who pays your salary?

HTH

Mo

[ncarring]

Interest on savings is taxed at a basic rate. After your salary is taxed via PAYE, at the end of the year they add up ALL your income and work out your total tax bill. Unless you are paid silly amounts of money, which I don't believe to be the case, you won't end up owing anything.

Read the rest of the letter and see what action they ask you to take. Then do what they say - it's the sensible thing to do.

Do you actually have any savings?

[Emily-Elizabeth]

Do you actually have any savings?

Not since I got the fabia :(

[bengie]

then don't worry about it.

you pay tax on any money you earn, you get paid by your employer and pay tax on that. if you have savings and get interest that counts as an income also so have to pay tax on it but unless you have many thousands in the bank the interest is sod all anyway and a small percentage of sod all is absolutely sod all so don't worry about it emily.

[MarkyMarkD]

Give them the info they seek, e.g. if you have savings in an account, you should have been asking for the interest not to be taxed as you ere not earning an income so tax wouldn't apply (though now it does). Check whether you have had tax deducted from any interest on savings you have, as you ought to be able to claim that tax back, if you fill in the right forms of course.

Mo, this is E-E we are talking about. I don't think she's likely to have registered for gross interest on her savings, tbh.

[Emily-Elizabeth]

Okay, so the situation is that if I am earning a tidy income from the interest of my millions in the bank, then I am taxed on that.

The reality is I paid nothing but interest on my overdraft and so I don't owe them anything.

This whole tax buisness is really complicated, and it is not something you are taught at school - so how can you know.

Ta all

Emily x

[expostmanpat]

Never mind EE when they prosecute you for tax evasion you can 'loose' the papers

[heresmo]

It's best IMO and as others have said to sort tax out soonest as traditionally employers are legally obliged to take the max tax likely from your salary until it's sorted out. Thus you might be unnecessarily out of pocket in the short term, even though you'll recover it or can claim it back - eventually.

Get it sorted out E-E, either with your employer (ask for their help), or the phone number on the letter, though, as you're at work, spending hours on "Press 1" etc might not be appreciated by CPS, so ask Personnel Department for help methinks.

Best

Mo

[Emily-Elizabeth]

Never mind EE when they prosecute you for tax evasion you can 'loose' the papers

And as there is a criminal justice unit in the same building I am hoping I can also potentially arrange to have a certain image from a red light camera lost as well.

[ric04vrs]

And as there is a criminal justice unit in the same building I am hoping I can also potentially arrange to have a certain image from a red light camera lost as well.

what were you doing in a red light area to be caught on a red light camera , or have i missed something in another thread:confused:

[vindaloo]

EE, it's not likely to be a problem unless you're a higher rate tax payer... i.e. somewhere above the high £20K-low £30K salary mark.

...In which case the little darlings will want more of a contribution than that which is collected by the bank/building society etc.

[Goochie]

EE, it's not likely to be a problem unless you're a higher rate tax payer... i.e. somewhere above the high

[tinkerbell]

It's basically a letter to advise you that as you are now in employment and will more than likely be earning enough to pay income tax, then any bank or building society account that you may have savings in should now not be registered to have the interest paid gross. You don't need to show it to your employer/payroll department as they probably won't know what it is either.

Your best bet is to telephone or call into the bank's etc that you have money deposited with and advise them that you are now paying income tax and as such you need tax stopping at source on these accounts also.

[Lady Elanore]

Hi Emily, I too, many years ago, started to get these dreaded letters from the Inland Revenue. I hated them! Even when I left my old job and was no longer earning enough to trigger their unholy attention (around