| TAX on savings [message #382947] |
Fr, 21 April 2006 19:26 |
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As an ordinary tax payer (i.e. my earnings are well below any point at
which i should pay tax at the higher rate) do I owe any tax on savings that
have already been taxed at the normal (lower rate)? For example a building
society account?
cheers
fj
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| Re: TAX on savings [message #382956 ] |
Fr, 21 April 2006 18:14 |
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Bitstring <ZL62g.31070$QZ3.22546 [at] newsfe09.ams>, from the wonderful
person fj <fj [at] mailmefor.inf> said
>As an ordinary tax payer (i.e. my earnings are well below any point at
>which i should pay tax at the higher rate) do I owe any tax on savings that
>have already been taxed at the normal (lower rate)? For example a building
>society account?
No. The source deducts tax at 20% and the government is happy to make do
with that instead of the 22% you 'should have' paid.
--
GSV Three Minds in a Can
Google may be your friend, but groups.google.com posters definitely aren't.
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| Re: TAX on savings [message #382973 ] |
Fr, 21 April 2006 23:38 |
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"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
news:ZJZ+B5BeTQSEFAp$ [at] from.is.invalid...
> Bitstring <ZL62g.31070$QZ3.22546 [at] newsfe09.ams>, from the wonderful person
> fj <fj [at] mailmefor.inf> said
>>As an ordinary tax payer (i.e. my earnings are well below any point at
>>which i should pay tax at the higher rate) do I owe any tax on savings
>>that
>>have already been taxed at the normal (lower rate)? For example a building
>>society account?
>
> No. The source deducts tax at 20% and the government is happy to make do
> with that instead of the 22% you 'should have' paid.
I don't think you win anything, 22% was introduced because they created that
new
progressive band at 10%. Obviously the 20% taken out of interest doesn't
include that lower band.
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| Re: TAX on savings [message #382975 ] |
Fr, 21 April 2006 23:53 |
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GSV Three Minds in a Can wrote:
> Bitstring <ZL62g.31070$QZ3.22546 [at] newsfe09.ams>, from the wonderful
> person fj <fj [at] mailmefor.inf> said
>>As an ordinary tax payer (i.e. my earnings are well below any point at
>>which i should pay tax at the higher rate) do I owe any tax on savings
>>that have already been taxed at the normal (lower rate)? For example a
>>building society account?
>
> No. The source deducts tax at 20% and the government is happy to make do
> with that instead of the 22% you 'should have' paid.
There is no "should have" about it, and no government is ever happy
to "make do".
20% is deducted because that is what you should pay.
Were you to get interest from somewhere which does not deduct tax
at source, you would still have only to pay 20% on it.
Capital gains are also taxed at 20%.
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| Re: TAX on savings [message #382978 ] |
Sa, 22 April 2006 00:59 |
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Bitstring <Xgc2g.49078$hn5.14843 [at] fe04.news.easynews.com>, from the
wonderful person Virgils Ghost <no [at] spam.com> said
>"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
>news:ZJZ+B5BeTQSEFAp$ [at] from.is.invalid...
>> Bitstring <ZL62g.31070$QZ3.22546 [at] newsfe09.ams>, from the wonderful person
>> fj <fj [at] mailmefor.inf> said
>>>As an ordinary tax payer (i.e. my earnings are well below any point at
>>>which i should pay tax at the higher rate) do I owe any tax on savings
>>>that
>>>have already been taxed at the normal (lower rate)? For example a building
>>>society account?
>>
>> No. The source deducts tax at 20% and the government is happy to make do
>> with that instead of the 22% you 'should have' paid.
>
>I don't think you win anything, 22% was introduced because they created that
>new
>progressive band at 10%. Obviously the 20% taken out of interest doesn't
>include that lower band.
If you are a 10% tax payer ISTR that you can reclaim the overpaid tax on
what has been deducted at 20%.
--
GSV Three Minds in a Can
Google may be your friend, but groups.google.com posters definitely aren't.
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| Re: TAX on savings [message #382979 ] |
Sa, 22 April 2006 01:06 |
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Bitstring <Fvc2g.57249$wl.43455 [at] text.news.blueyonder.co.uk>, from the
wonderful person Ronald Raygun <no.spam [at] localhost.localdomain> said
>>>As an ordinary tax payer (i.e. my earnings are well below any point at
>>>which i should pay tax at the higher rate) do I owe any tax on savings
>>>that have already been taxed at the normal (lower rate)? For example a
>>>building society account?
>>
>> No. The source deducts tax at 20% and the government is happy to make do
>> with that instead of the 22% you 'should have' paid.
>
>There is no "should have" about it, and no government is ever happy
>to "make do".
>
>20% is deducted because that is what you should pay.
Yes, but this is a concession from where it used to be, when interest
income was added to your other incomes and the whole mess taxed at basic
rate. Maybe you are too young to remember?
<CGT stuff snipped>
--
GSV Three Minds in a Can
Google may be your friend, but groups.google.com posters definitely aren't.
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| Re: TAX on savings [message #382993 ] |
Sa, 22 April 2006 11:48 |
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In message of Sat, 22 Apr 2006, GSV Three Minds in a Can writes
>Bitstring <Fvc2g.57249$wl.43455 [at] text.news.blueyonder.co.uk>, from the
>wonderful person Ronald Raygun <no.spam [at] localhost.localdomain> said
>>>>As an ordinary tax payer (i.e. my earnings are well below any point at
>>>>which i should pay tax at the higher rate) do I owe any tax on savings
>>>>that have already been taxed at the normal (lower rate)? For example a
>>>>building society account?
>>>
>>> No. The source deducts tax at 20% and the government is happy to make do
>>> with that instead of the 22% you 'should have' paid.
>>
>>There is no "should have" about it, and no government is ever happy
>>to "make do".
>>
>>20% is deducted because that is what you should pay.
>
>Yes, but this is a concession
No 'concession' it is the LAW
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| Re: TAX on savings [message #383005 ] |
Sa, 22 April 2006 19:55 |
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Thanks to everyone who answered
fj
"fj" <fj [at] mailmefor.inf> wrote in message
news:ZL62g.31070$QZ3.22546 [at] newsfe09.ams...
> As an ordinary tax payer (i.e. my earnings are well below any point at
> which i should pay tax at the higher rate) do I owe any tax on savings
that
> have already been taxed at the normal (lower rate)? For example a building
> society account?
>
> cheers
>
> fj
>
>
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| Re: TAX on savings [message #383019 ] |
Sa, 22 April 2006 23:12 |
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Bitstring <ptrjF1k7vfSEFwsN [at] 127.0.0.1>, from the wonderful person David
Floyd <david [at] floyd.org.uk> said
>In message of Sat, 22 Apr 2006, GSV Three Minds in a Can writes
>>Bitstring <Fvc2g.57249$wl.43455 [at] text.news.blueyonder.co.uk>, from the
>>wonderful person Ronald Raygun <no.spam [at] localhost.localdomain> said
>>>>>As an ordinary tax payer (i.e. my earnings are well below any point at
>>>>>which i should pay tax at the higher rate) do I owe any tax on savings
>>>>>that have already been taxed at the normal (lower rate)? For example a
>>>>>building society account?
>>>>
>>>> No. The source deducts tax at 20% and the government is happy to make do
>>>> with that instead of the 22% you 'should have' paid.
>>>
>>>There is no "should have" about it, and no government is ever happy
>>>to "make do".
>>>
>>>20% is deducted because that is what you should pay.
>>
>>Yes, but this is a concession
>
>No 'concession' it is the LAW
Many 'concessions' are enshrined in law, especially the finance acts.
You obviously haven't waded through thedocumentation, or you would have
noticed many things which can only be considered concessions, like
married couples allowance being retained (in mangled form) for those
over a certain age, and tax loopholes associated with antique pensions
schemes still being preserved (OK, many of those finally got the chop
this April).
Anyway, you call it what you like, and I'll call it a concession. That
way I won't be as upset as you when some future chancellor decides to
set the rate back to match basic rate of income tax, or to tax dividends
at 20% instead of 10%.
--
GSV Three Minds in a Can
Google may be your friend, but groups.google.com posters definitely aren't.
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| Re: TAX on savings [message #383023 ] |
So, 23 April 2006 04:27 |
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"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
<
> Anyway, you call it what you like, and I'll call it a concession. That way
> I won't be as upset as you when some future chancellor decides to set the
> rate back to match basic rate of income tax
Again, the 20% tax on interest doesn't include the 10% progressive band. The
reason the 22% band was created for income tax was because they introduced
the 10% stage, hence the extra 2% on 22% to offset this lower rate further
down the scale.
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| Re: TAX on savings [message #383024 ] |
So, 23 April 2006 10:40 |
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GSV Three Minds in a Can wrote:
> Anyway, you call it what you like, and I'll call it a concession. That
> way I won't be as upset as you when some future chancellor decides to
> set the rate back to match basic rate of income tax, or to tax dividends
> at 20% instead of 10%.
They can put whatever figure they like as the dividend tax rate, in reality,
it doesn't make much difference unless the tax "credit" pushes you into a
higher tax band. In reality, most dividends are taxed at 30%.
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| Re: TAX on savings [message #383027 ] |
So, 23 April 2006 11:11 |
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"Virgils Ghost" wrote
> The reason the 22% band was created for income tax was
> because they introduced the 10% stage, hence the extra
> 2% on 22% to offset this lower rate further down the scale.
If that were the reason, then why are the tax
rates on *interest* set at 10% then 20%?
According to your reasoning, the rates would have
been set at 20% & 20% -OR- 10% & 22%.
But they weren't - the rates are 10% & 20%...
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| Re: TAX on savings [message #383029 ] |
So, 23 April 2006 11:16 |
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"Virgils Ghost" wrote
> The reason the 22% band was created...
Did you mean:-
(A) "The reason the basic rate
band was created decades ago";
-OR-
(B) "The reason the basic rate was
reduced down to 22% a few years ago"
?
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| Re: TAX on savings [message #383036 ] |
So, 23 April 2006 13:43 |
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In message of Sun, 23 Apr 2006, Virgils Ghost writes
>"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
><
>> Anyway, you call it what you like, and I'll call it a concession. That way
>> I won't be as upset as you when some future chancellor decides to set the
>> rate back to match basic rate of income tax
>
>Again, the 20% tax on interest doesn't include the 10% progressive band.
Don't understand what you mean by this. When an individual's self
assessment is worked out and the reduced rate of 10% hasn't been used up
then any interest income will be subject to tax at 10% (assuming other
allowances have been used up). So if it's already been taxed at 20% at
source there cold be a refund due.
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| Re: TAX on savings [message #383050 ] |
So, 23 April 2006 16:25 |
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"David Floyd" <david [at] floyd.org.uk> wrote in message
news:ZEm$fOnPh2SEFw4u [at] 127.0.0.1...
> In message of Sun, 23 Apr 2006, Virgils Ghost writes
>>"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
>><
>>> Anyway, you call it what you like, and I'll call it a concession. That
>>> way
>>> I won't be as upset as you when some future chancellor decides to set
>>> the
>>> rate back to match basic rate of income tax
>>
>>Again, the 20% tax on interest doesn't include the 10% progressive band.
>
> Don't understand what you mean by this. When an individual's self
> assessment is worked out and the reduced rate of 10% hasn't been used up
> then any interest income will be subject to tax at 10%
Does the 20% tax on interest include the 10% progression? As far as I'm
aware it's just simple 20%, correct me if this is wrong.
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| Re: TAX on savings [message #383051 ] |
So, 23 April 2006 16:33 |
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In message of Sun, 23 Apr 2006, Virgils Ghost writes
>"David Floyd" <david [at] floyd.org.uk> wrote in message
>news:ZEm$fOnPh2SEFw4u [at] 127.0.0.1...
>> In message of Sun, 23 Apr 2006, Virgils Ghost writes
>>>"GSV Three Minds in a Can" <GSV [at] quik.clara.co.uk> wrote in message
>>><
>>>> Anyway, you call it what you like, and I'll call it a concession. That
>>>> way
>>>> I won't be as upset as you when some future chancellor decides to set
>>>> the
>>>> rate back to match basic rate of income tax
>>>
>>>Again, the 20% tax on interest doesn't include the 10% progressive band.
>>
>> Don't understand what you mean by this. When an individual's self
>> assessment is worked out and the reduced rate of 10% hasn't been used up
>> then any interest income will be subject to tax at 10%
>
>Does the 20% tax on interest include the 10% progression? As far as I'm
>aware it's just simple 20%, correct me if this is wrong.
>
>
The rates of tax (for chargeable income after allowances) for
individuals are as follows:
Interest: 10%,20%,40%
Other earned and unearned income: 10%,22%,40%
Dividends: 10%(deemed to have been paid), 32.5%(10% deemed to have been
paid)
Capital Gains: 20%,40%
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