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Help understanding my Annual Tax Summary (OT)

Posted: Sat Mar 16, 2019 2:15 pm
by cpedw
I recently received the Notice of Coding for next year's Income Tax. All very understandable. In a commendably economical move, HMRC included in the same envelope my Annual Tax Summary for 2017-18. That's where the problem lies in a trivial yet annoying way.

My income tax is pretty simple: State pension, workplace pension, no NI as I'm too old to bother with.
The document has a section "Your tax was calculated as" which shows

Basic rate income tax £squillions at 20% £x [arithmetic is spot on]
Total Income Tax £y [y is £29 less than x]
This includes Scottish Income Tax of £x
Your Income after Tax £pretax - y

I understand that ScotGov is setting Scottish income tax nowadays but I think x is the right figure for my tax for the year, and it would be the same for any UK payer in 2017-18. Is there a good reason why Total Tax is less?

So far as I can tell, Total Tax is what I actually paid.

Has anyone else had a puzzling message like this?

Re: Help understanding my Annual Tax Summary (OT)

Posted: Sat Mar 16, 2019 3:14 pm
by Nick
.
Not sure I entirely understand what you are asking, but there is a 19% income tax band rate in Scotland on the first £2,000 of taxable income, which means low earners pay less income tax in Scotland to the tune of £20 per annum.

Re: Help understanding my Annual Tax Summary (OT)

Posted: Sat Mar 16, 2019 4:01 pm
by cpedw
I think the rate for 2017-18 was 20% up to 40k odd, and the same as rest of UK.

My puzzles are:
Why is Scottish tax more than I paid?
Why is Basic rate tax (which is same as Scottish) more than I paid?

I seem to be better off than I should be so perhaps I should stay quiet.

Re: Help understanding my Annual Tax Summary (OT)

Posted: Sat Mar 16, 2019 4:15 pm
by Marcotte
That's interesting indeed. Is this the first year you're better off than you expected?

Nah, you shouldn't stay quiet. It's good to understand these things and it could be a learning experience for everyone here. haha

Re: Help understanding my Annual Tax Summary (OT)

Posted: Sat Mar 16, 2019 6:59 pm
by Nick
cpedw wrote:I think the rate for 2017-18 was 20% up to 40k odd, and the same as rest of UK.


You think wrong.

Image

Re: Help understanding my Annual Tax Summary (OT)

Posted: Sat Mar 16, 2019 8:15 pm
by cpedw
Nick wrote:You think wrong.
Oh no I don't

https://www.gov.uk/scottish-income-tax/2017-to-2018-tax-year gives

Band . . . . . . . . . . . Taxable income . . . . Scottish tax rate
Personal Allowance . . Up to £11,500 . . . . . . .0%
Basic rate . . . . . . . . £11,501 to £43,000. . . 20%
Higher rate . . . . . . . £43,001 to £150,000 . . 40%
Additional rate . . . . .over £150,000. . . . . . .45%

Yours are this year's numbers. I'm looking at 2017-18.

Derek

Re: Help understanding my Annual Tax Summary (OT)

Posted: Sun Mar 17, 2019 2:46 pm
by Nick
cpedw wrote:
Nick wrote:You think wrong.
Oh no I don't

https://www.gov.uk/scottish-income-tax/2017-to-2018-tax-year gives

Band . . . . . . . . . . . Taxable income . . . . Scottish tax rate
Personal Allowance . . Up to £11,500 . . . . . . .0%
Basic rate . . . . . . . . £11,501 to £43,000. . . 20%
Higher rate . . . . . . . £43,001 to £150,000 . . 40%
Additional rate . . . . .over £150,000. . . . . . .45%

Yours are this year's numbers. I'm looking at 2017-18.

Derek


OK, apologies. I thought the Starter Rate had started last year.

Re: Help understanding my Annual Tax Summary (OT)

Posted: Mon Mar 18, 2019 12:09 am
by ash
cpedw wrote:I recently received the Notice of Coding for next year's Income Tax. All very understandable. In a commendably economical move, HMRC included in the same envelope my Annual Tax Summary for 2017-18. That's where the problem lies in a trivial yet annoying way.


I understand that ScotGov is setting Scottish income tax nowadays but I think x is the right figure for my tax for the year, and it would be the same for any UK payer in 2017-18. Is there a good reason why Total Tax is less?

So far as I can tell, Total Tax is what I actually paid.

Has anyone else had a puzzling message like this?

Maybe HMRC think that you overpaid in previous years. Have you recently started claiming a bit of your partner's tax free allowance?

Ash

Re: Help understanding my Annual Tax Summary (OT)

Posted: Mon Mar 18, 2019 6:16 pm
by cpedw
ash wrote:Maybe HMRC think that you overpaid in previous years. Have you recently started claiming a bit of your partner's tax free allowance?

Ash

I don't think either of those applies. Interestingly, Jane (SWMBO to her friends) received a very similar Annual Summary.

On reflection, it's just possible that overpayment may have happened previously but don't they let you know explicitly when that's happening? I don't remember any notice of that but then I don't remember a time when Brexit wasn't all-pervading either.

Derek

Re: Help understanding my Annual Tax Summary (OT)

Posted: Fri Mar 22, 2019 1:31 pm
by Telo
Understanding tax codes used to be a fairly simple process, but in recent years I admit that I also have been having difficulty making head or tail of their statements. Similarly with state pension statements (bits contracted in, bits contracted out, payments for graduated pensions in the 60s and 70s....), although my experience of these has been over a much shorter timescale.

It strikes me that some of this may be deliberate on the part of our government. It's pretty clear that universal credit and immigration compliance are being consciously made as difficult as possible for claimants and asylum seekers. Doesn't seem a great leap to extend those attitudinal behaviours to the rest of us.