Tax Return DIY

[yottie]

Have previously chosen to let Inland Revenue calculate the amount of tax due on interest and dividends.
My pension etc is taxed at source.
Is it best to let them inform how much I owe each year or should I elect to send a self assessment.
The alternative would appear to be to do my own calculation then contact them if figures seem to differ.
This would seem to be a lazy way out for me but it would take away the pressure of having to submit each year by January, or pay a fine.

 

[SammyInnit]

Can't think of anyone in history who thought it would be a good idea for HMRC to tell you what you owe them.

It's really not as much of a task as you're making it sound. Mines submitted within two days after April the 5th and that's a couple of hours one day doing a the calcs and a few hours before submitting just to check it over.

 

[JohnD]

The alternative would appear to be to do my own calculation then contact them if figures seem to differ.

Do that. If you are a plumber I'm sure your accountant will perform the calculation anyway.

But the tax-free interest allowance is now often £1,000 but could be anything from £1,000 to £5,000, or nil

And the dividend allowance £2,000 (reduced this year from £5,000)

If we were to assume that a taxpayer is currently earning 1.5% interest, he would need savings averaging over the year between £66,000 and £330,000 to be paying tax on it, unless quite a high earner

If we were to assume a dividend yield of 3% across his direct portfolio, he would need equity investments around £66,000.

With care and intelligence, such an investor would have tucked away the first million or so in ISAs and SIPPs, especially his higher-yielding shares, with £50,000 in premium bonds, so not taxable.

The allowances are quite generous enough for the great majority of taxpayers. Most citizens of this country would welcome the opportunity to be rich enough to pay tax on their savings and investments.

 

[motorbiking]

Where can I get 1.5% on 100k - genuine question, not taking the pee.

 

[JohnD]

Where can I get 1.5% on 100k - genuine question, not taking the pee.

example
https://uk.virginmoney.com/savings/products/double_take_e_saver_issue_10/

see also
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Premium Bonds are currently (randomised)
Annual prize fund interest rate 1.40%
Tax All prizes tax-free

ISAs are also tax free.

Bearing in mind that
https://www.moneysavingexpert.com/content/mse/msecom/en-gb/content/overlay/fscs-protection/
although Iceland, for example, may not honour it.

 

[motorbiking]

I always felt someone could make a killing offering a service to manage all the money that has to float around each month to maximise the interest. Its so hard to keep up.

I have so many direct debits going in different directions.

I' m maxed on premium bonds

 

[noseall]

Have previously chosen to let Inland Revenue calculate the amount of tax due

I pay an accountant to do that for me. In fact, all my tax and NI affairs are dealt with by my accountant. Thank goodness.

 

[EddieM]

Premium bonds aren't a good investment in general.

 

[EddieM]

I pay an accountant to do that for me. In fact, all my tax and NI affairs are dealt with by my accountant. Thank goodness.

Likewise, I tried doing my VAT return myself last quarter, I'd have paid £500 more if I'd gone with my figures

 

[Ihavenojob]

Phone them up & pay by card over the phone.

 

[JohnD]

Premium bonds aren't a good investment in general.

Neither is cash on deposit.

That's because they are not investments.

 

[EddieM]

Neither is cash on deposit.

That's because they are not investments.

Ok, fair enough, let me re-phrase it, PB's offer a poor return on average.

 

[motorbiking]

yes. i should have bought bitcoin with it.

 

[Notch7]

PBs are around 1.15% return average.

Better than many savings accounts and much better than a poke in the eye with a blunt stick.....

 

[yottie]

I win most months on PBs, albeit modest amounts, but the day will come!!