2nd job, what tax rate? and other qquestions.

I cannot see why your employer should be informed of the second income

- unless it conflicts with their business ? The higher rate at 40% starts at £32400.00 on taxable income. If your current gross is £27,000 then the taxable on this will be £22105.00 ( less personal allowance 4895 ). This leaves over £10,000.00 you can earn before the 40% starts on the 2nd income so you will be liable at

40% on the balance over £32400.00. As for self-assessment will it be self-employment or a LTD Company ? Either way I would say you would have to complete in either case - either as a self - employed person or as a Director of a company - if your are a Director you will have to operate P.A.Y.E. on you salary. I am not sure if all Directors have to complete S.A. Tax Returns however.

All 40% tax payers are required to complete a SA return though.

Not any more. I got a letter saying I won't be getting them any more. Ironic, as this year I want one as I got things to claim...

No need to inform your employer unless your work contract specifies that you should be (they sometimes do).

You phone the inland revenue after the end of the tax year and explain your situation. They'll send a self-assessment form then.

As the other poster said, you have £10,000 left before hitting the 40% rate. Get an accountant to do the tax return for you, it's a nightmare to do the form if you have 2 incomes, especially once you hit the 40% rate.

You have 3 choices for doing your finances:

1) No "proper" registered company (perfectly normal and legal). Everything goes through as normal personal income. Accountant fees about £200 (which are fully tax deductable) 2) Sole trader company. Costs for company setup + same accountant fees as above. 3) Limited company. Costs more to setup and much more for accountancy fees. However you can end up saving tax if you start earning good money. Otherwise not worth it imho.

Within 3 months of commencing self employment, or a £100 fine.

These two are just one option

No they're not!

I have 40% rate clients who don't have a SA return. And I have one client who has been taken out of the SA system this year who is a 40% payer AND has P11D benefits. I shall still do an ELS return for him; even though not requested.

DF

So exactly who is required to do an SA return these days?

Usually those who are not on PAYE and some people who are on PAYE, if the Inland Revenue so decides. These PAYE people are usually those who have other untaxed income, or have complicated affairs.

There is not always a complication about being on PAYE and being a 40% payer, and the Inland Revenue have had a spurge these last 6 months in trying reduce the unnecessary SA Returns.

David

But I don't understand this, because I guess nearly all 40% tax payers have some interest to declare, even if it's just a few pounds current account interest. You are legally obliged to declare all income that is not fully taxed, so how can you do this without a tax return?

In message of Mon, 30 May 2005, Andy Pandy writes

If the IR take some-one out of the SA system it doesn't absolve the tax-payer from having to make a return of his income (as you assume above). If the person has already been in the SA system then they have a UTR for life. So, even if a SA Return , or Notice to File, has not been issued one can still be completed on-line or a paper one can be asked for.

Except for the very complicated cases the IR are trying to cut down on paperwork and unnecessary work. In many PAYE cases untaxed interest, or higher rate adjustment for taxed interest will be made on the coding notice. Any under or overpayment will be calculated later in the year and any underpayment collected in the following year's coding.

David

No I don't assume that, that's the point.

Every year I earn a different amount of interest (only a few pounds, but still), and claim a different amount in gift aid etc. The IR know this. So I must declare it every year, by law. So why have they stopped sending me the form on which I declare it?

What's a UTR?

So instead of them sending me one automatically every year, I have to ask them to send me one every year. How does this cut down on unneccessary paperwork?

And they can only know what the under/overpayment is if I tell them my income etc - via my tax return!

Am I missing something here?

In message of Mon, 30 May 2005, Andy Pandy writes

Probably insignificant.

Your 10 digit SA number (Unique Taxpayer Reference)

Because the majority of cases chosen will not be like you, and in some of the other simple cases they will send out a single sheet question sheet. (see below). If yours becomes significant again they will flag your case for a Return next the following year.

There is a single sheet form that the IR sometimes send out (I can't remember it's number now, and being Bank Holiday I can't be bothered to look for one) which asks a few simple questions about interest etc so that they can complete their PAYE assessment for you based on PAYE and P11D info.

David

Unique Taxpayer Reference, a code consisting of 10 figures that identifies you as a taxpayer.

Alec

Exactly!

"David Floyd" wrote

So should we assume that *all* high-rate taxpayers who don't get a SATR will be sent one of those forms? Because like Andy said, the HRT with absolutely *no* interest received/other income, nor other reliefs to claim (eg gift aid), must be very rare indeed!

In message of Mon, 30 May 2005, Tim writes

You cannot assume anything about Inland Revenue actions! :-(

David

In message , Andy Pandy writes

They sent me a short one, and I need to ask them for a full one.