Self assessment tax forms

[Chris S]

I don't work as I can live off the interest on several savings accounts that I have.
I now have to pay tax on this and have to fill in a self assessment form.
HMRC will know my precise income because the banks will inform them of all the interest that they have paid me.
Does anybody know what happens if I calculate my income incorrectly? Will I receive a rebate if I pay too much tax? Will I receive a penalty if I pay too little?

 

[SpokeyDokey]

I don't work as I can live off the interest on several savings accounts that I have.
I now have to pay tax on this and have to fill in a self assessment form.
HMRC will know my precise income because the banks will inform them of all the interest that they have paid me.
Does anybody know what happens if I calculate my income incorrectly? Will I receive a rebate if I pay too much tax? Will I receive a penalty if I pay too little?

You will get a rebate if you overpay and vice-versa.

You will only get a fine for deliberate evasion.

Once I under-calculated my non-earned income during a particularly complicated (multiple 'paid away' FRB's) year and there was no problem.

That was my ecperience FWIW. As ever, always ask an expert to be 100% sure.

 

[slowmotion]

You will almost certainly get statements of interest from each of your investments. I just use those to calculate the total interest for my tax return. I keep a copy of my calculation to show to HMRC if they quibble. I work on the principle that if I have submitted my tax return in good faith, HMRC is unlikely to penalise me. Of course, being human, I might make a genuine mistake, in which case I'm more than prepared to pay the correct amount of tax.

 

[Cycleops]

Yes and yes.
I find the most annoying and frustrating part of the online tax forms is proving who you are.
You have to download an app and go through all sorts of hoops and give all sorts of information.
I use Microsoft Authenticator. Leave plenty of time to fill it.

 

[sleuthey]

Yes and yes if HMRC are doing Thier jobs correctly.

Don't forget that if your a 40p band tax payer then your personal allowance will be £500/y less than for 20p band.

 

[Landsurfer]

Move all your money offshore … HSBC … is the safest bet … the Hong Kong and Shanghai Banking Corporation will happily keep your tax details away from HMRC …

 

[Slick]

Yes and yes.
I find the most annoying and frustrating part of the online tax forms is proving who you are.
You have to download an app and go through all sorts of hoops and give all sorts of information.
I use Microsoft Authenticator. Leave plenty of time to fill it.

To be fair, once that is set up, its dead easy for future use.

 

[Slick]

My understanding from HMRC is, they haven't got the time to check every claim, so will happily pay out on every reasonable claim made. Eventually however, they will audit their own payouts and if anything is found to be incorrect, they will want it back plus interest and penalties.

Also, thinking Hector the Inspector it a nice reasonable guy who won't punish innocent mistakes is not my understanding of the current tax system.

 

[Chris S]

I've now registered for online self assessment. I was expecting to get an online form to fill in but instead I've just been redirected to a home page informing me that HMRC will contact me if there is any outstanding tax to pay. I suppose it's now just a case of waiting.

 

[DCLane]

With a tax accountant as a parent his advice was to have at least one year in five when you pay them something rather than a refund, with refunds for the other four.

It's generally worked for me, even when I 100% deprecated the office build in a single year. Yes, I got a 'don't do that again ' letter but I'd no intention to - I'd had a big private income boost for that one year only. "Oops, sorry" was my reply.

Also, if only one in a couple pay 40% tax then that individual can get a larger tax rebate for any charity donations. And for anyone offended I didn't invent the system, just use it ...

 

[Slick]

Why would anyone be offended?

With a tax accountant as a parent his advice was to have at least one year in five when you pay them something rather than a refund, with refunds for the other four.

It's generally worked for me, even when I 100% deprecated the office build in a single year. Yes, I got a 'don't do that again ' letter but I'd no intention to - I'd had a big private income boost for that one year only. "Oops, sorry" was my reply.

Also, if only one in a couple pay 40% tax then that individual can get a larger tax rebate for any charity donations. And for anyone offended I didn't invent the system, just use it ...

 

[DCLane]

Why would anyone be offended?

I'd mentioned that I'd got a tax rebate on my charity donations to a work colleague and received a 20-minute blast of how unethical and wrong doing that was. When they'd finished I quietly pointed out that I'd given that part of the rebate back to the charity. And claimed tax back on the re-giving ...

 

[Slick]

I'd mentioned that I'd got a tax rebate on my charity donations to a work colleague and received a 20-minute blast of how unethical and wrong doing that was. When they'd finished I quietly pointed out that I'd given that part of the rebate back to the charity. And claimed tax back on the re-giving ...

I'm amazed anyone would have an opinion on it either way. As you say, it isn't your system and I certainly wouldn't be up for a blast, 20 minutes or otherwise.

 

[slowmotion]

Also, thinking Hector the Inspector it a nice reasonable guy who won't punish innocent mistakes is not my understanding of the current tax system.

I've got better things to do with my life than sit in a darkened room gibbering and sweating with paranoia, wondering if Hector is going to smash down my front door at 3am, searching for evidence of financial impropriety.

I suspect he has too.

 

[Slick]

I've got better things to do with my life than sit in a darkened room gibbering and sweating with paranoia, wondering if Hector is going to smash down my front door at 3am, searching for evidence of financial impropriety.

I suspect he has too.

So have I, which is why I pay an accountant to ensure I pay the right amount. He's tax deductible as well.