| 'Negative selling' (aka 'guilty until you appeal) from Inland revenue .. [message #373521] |
Mo, 13 März 2006 18:26 |
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I just viewed a tax coding letter to someone who'd turned 65 (not me,
not quite yet) and it basically went 'pension from state £5.1k, other
income £150, personal allowance for someone aged 65, with income over
£24.5k, £5k .. thus we'll be sending a negative £250 tax code to your
company pension scheme so they can deduct the extra tax.'
At that point I went 'whoa, so how much company pension do you get
then?' .. answer £5k (well known to the inland revenue). 'How much
interest income?' £3k .. also known to IR. (At least a couple of years
ago when this person last filled in a self assessment tax form).
'So the basic personal allowance, for someone with £13.25k total income
is what?', I asks the IR .. '£7.6k they reply'. So why do they send out
a tax code assuming someone is getting enough above the income limit to
completely wipe out the old person's personal allowance increase (even
when they have enough recent tax returns to know it ain't so) ..
'negative selling' .. or basically 'guilty until proven innocent'.
I wonder how many 65+ year old dears are getting ripped off on the
personal allowance because they never read all the footnotes in the
coding letter, or because they didn't understand they were entitled to
more??
--
GSV Three Minds in a Can
Contact recommends the use of Firefox; SC recommends it at gunpoint.
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| Re: 'Negative selling' (aka 'guilty until you appeal) from Inland revenue .. [message #373524 ] |
Mo, 13 März 2006 19:16 |
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For the simpletons amongst us please elucidate. Where was the Mistake?
"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
news:1wdlPwMRtaFEFA3R [at] from.is.invalid...
|I just viewed a tax coding letter to someone who'd turned 65 (not me,
| not quite yet) and it basically went 'pension from state £5.1k, other
| income £150, personal allowance for someone aged 65, with income over
| £24.5k, £5k .. thus we'll be sending a negative £250 tax code to your
| company pension scheme so they can deduct the extra tax.'
|
| At that point I went 'whoa, so how much company pension do you get
| then?' .. answer £5k (well known to the inland revenue). 'How much
| interest income?' £3k .. also known to IR. (At least a couple of years
| ago when this person last filled in a self assessment tax form).
|
| 'So the basic personal allowance, for someone with £13.25k total income
| is what?', I asks the IR .. '£7.6k they reply'. So why do they send out
| a tax code assuming someone is getting enough above the income limit to
| completely wipe out the old person's personal allowance increase (even
| when they have enough recent tax returns to know it ain't so) ..
| 'negative selling' .. or basically 'guilty until proven innocent'.
|
| I wonder how many 65+ year old dears are getting ripped off on the
| personal allowance because they never read all the footnotes in the
| coding letter, or because they didn't understand they were entitled to
| more??
|
| --
| GSV Three Minds in a Can
| Contact recommends the use of Firefox; SC recommends it at gunpoint.
|
|
|
| Re: 'Negative selling' (aka 'guilty until you appeal) from Inland revenue .. [message #373538 ] |
Mo, 13 März 2006 23:39 |
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Bitstring <OFiRf.614$qH2.238 [at] newsfe4-win.ntli.net>, from the wonderful
person Stickems. <Stickems.? [at] last.invalid> said
>For the simpletons amongst us please elucidate. Where was the Mistake?
See, I told you it was sneaky - you obviously don't understand the rules
either. Your tax free band goes up from £5k to about £7.5k (numbers all
rounded) when you reach 65 .. actually for the tax year in which you
reach 65. The increases is reduced by £1 for every £2 you earn over the
threshold, currently set at about £19k
The mistake was in them =assuming= that the recipient had £24.5k plus of
total income, and thus should have their old age related personal
allowance reduced until it was the same as the vanilla (person under 65)
one.
Whatever next ?... 'we assume you've used all you tax free band on
dodgy income from the Channel Islands, so we're starting you off at a
flat 22%'?
--
GSV Three Minds in a Can
Contact recommends the use of Firefox; SC recommends it at gunpoint.
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| Re: 'Negative selling' (aka 'guilty until you appeal) from Inland revenue .. [message #373592 ] |
Di, 14 März 2006 20:06 |
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"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
news:CGvIiQAaSfFEFADk [at] from.is.invalid...
> See, I told you it was sneaky - you obviously don't understand the rules
> either. Your tax free band goes up from £5k to about £7.5k (numbers all
> rounded) when you reach 65 .. actually for the tax year in which you
> reach 65. The increases is reduced by £1 for every £2 you earn over the
> threshold, currently set at about £19k
>
> The mistake was in them =assuming= that the recipient had £24.5k plus of
> total income, and thus should have their old age related personal
> allowance reduced until it was the same as the vanilla (person under 65)
> one.
>
> Whatever next ?... 'we assume you've used all you tax free band on
> dodgy income from the Channel Islands, so we're starting you off at a
> flat 22%'?
The PAYE system should be able to cope with this without the IR having to guess your
income. All it'd need is a letter in the tax code to denote entitlement to the age
allowance, and then a tax code based on the full age allowance. The letter would
signal to the PAYE system to insert a 33% tax band between about £19k and £24.5k.
--
Andy
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| Re: 'Negative selling' (aka 'guilty until you appeal) from Inland revenue .. [message #373600 ] |
Di, 14 März 2006 23:29 |
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Bitstring <47oii9Fgai74U1 [at] individual.net>, from the wonderful person
Andy Pandy <spam8times [at] wonderful.spam.invalid> said
>
>"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
>news:CGvIiQAaSfFEFADk [at] from.is.invalid...
>> See, I told you it was sneaky - you obviously don't understand the rules
>> either. Your tax free band goes up from £5k to about £7.5k (numbers all
>> rounded) when you reach 65 .. actually for the tax year in which you
>> reach 65. The increases is reduced by £1 for every £2 you earn over the
>> threshold, currently set at about £19k
>>
>> The mistake was in them =assuming= that the recipient had £24.5k plus of
>> total income, and thus should have their old age related personal
>> allowance reduced until it was the same as the vanilla (person under 65)
>> one.
>>
>> Whatever next ?... 'we assume you've used all you tax free band on
>> dodgy income from the Channel Islands, so we're starting you off at a
>> flat 22%'?
>
>The PAYE system should be able to cope with this without the IR having
>to guess your
>income. All it'd need is a letter in the tax code to denote entitlement
>to the age
>allowance, and then a tax code based on the full age allowance. The
>letter would
>signal to the PAYE system to insert a 33% tax band between about £19k
>and £24.5k.
Except it also applies to unearned (non PAYE) income .. dividend income
and interest for instance...
--
GSV Three Minds in a Can
Contact recommends the use of Firefox; SC recommends it at gunpoint.
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| Re: 'Negative selling' (aka 'guilty until you appeal) from Inland revenue .. [message #373609 ] |
Mi, 15 März 2006 19:07 |
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"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
news:oMFiAKHwO0FEFA3c [at] from.is.invalid...
> >The PAYE system should be able to cope with this without the IR having
> >to guess your
> >income. All it'd need is a letter in the tax code to denote entitlement
> >to the age
> >allowance, and then a tax code based on the full age allowance. The
> >letter would
> >signal to the PAYE system to insert a 33% tax band between about £19k
> >and £24.5k.
>
> Except it also applies to unearned (non PAYE) income .. dividend income
> and interest for instance...
Non PAYE income is always a problem - you'd have to fiddle the tax code or claim a
refund/pay extra at the end of the tax year in the same way as people whose top tax
rate is 10% or 40%.
--
Andy
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