0845 6013321
01308 488066

Frequently Asked Questions

What is HMRC’s phone number?

Call HMRC for help with questions about Income Tax, including PAYE coding notices, Marriage Allowance and changing your personal details. Have your National Insurance number with you when you phone.

  • Telephone: 0300 200 3300
  • Textphone: 0300 200 3319
  • Outside UK: +44 135 535 9022

Phone lines are less busy before 10am, Monday to Friday.

Opening times:

  • 8am to 8pm, Monday to Friday
  • 8am to 4pm Saturday
  • Closed Sundays and bank holidays

Call Charges

The costs below are approximate. Check with your phone provider to find out the actual cost, particularly if you’re calling from abroad. Calls from payphones can cost more.

  • Cost from landlines (per minute): up to 12p
  • Cost from mobiles (per minute) approx: 3p-45p

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Is my state pension taxable?

Yes, it is. However, there is no mechanism to deduct tax due at source so those pensioners with occupational pensions have their personal tax allowance reduced by the amount of the state pension so that the tax due on both sources is all deducted from the occupational pension.

If your state pension exceeds your personal tax allowance but you do not have any other source of income, then HM Revenue & Customs (HMRC) will collect the tax in a lump sum through the self assessment system.

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What are the tax bands?

Income 2016-2017 Income 2015-2016
£0 to £32,000 20% £0 - £31,865 20%
£32,001 to £150,000 40% £31,866 to £150,000 40%
Over £150,000 45% Over £150,000 45%

These rates apply to TAXABLE income that is over and above your personal allowance. For example, a pensioner aged 69 would have to have income of over £11,000, 16/17 before paying tax at 20% and over £43,000, 16/17 before paying at 40%.

Starting Rate for Savings - 2015/16 & 2016/17 is 0%. Only applies to those with taxable income under £15,600 15/16 & £16,000 16/17. For more information please go to FAQ - Can you explain the 0% Starting Rate for Savings and the Personal Savings Allowance?

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What are my allowances?

For 2015/16 and 2016/17  the Chancellor announced the following changes (subject to becoming law in the Finance Act)

15/16 16/17
People born after 5th April 1938 £10,600 £11,000
People born before 6th April 1938
and total income below £27,700 - 15/16
£10,660 £11,000
Marriage Allowance £1,060 £1,100
Blind Persons Allowance £2,290 £2,290
Starting Rate for Savings  £5,000  £5,000
Personal Savings Allowance - Basic rate tax payer    N/A  £1,000
Personal Savings Allowance - Higher rate tax payer    N/A  £500

Married Couples Allowance  - You are eligible where at least one of you was born before 6th April 1935. 15/16 & 16/17 £8,355 but only allowed as a 10% reduction to your tax bill on incomes below £27,820 15/16 £27,700 16/17. This means that your tax bill will be reduced by up to £835, to nil, it cannot create a refund.

People on incomes over  £38,090 15/16 & 16/17 will not receive the allowance.

Starting Rate for Savings - Only applies to those with taxable income under £15,600 15/16 & £16,000 16/17. For more information please go to FAQ - Can you explain the 0% Starting Rate for Savings and the Personal Savings Allowance?

 

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Am I entitled to Married Couple’s Allowance?

Only, if you or your wife, or partner if you are in a civil partnership were born before 6 April 1935. HMRC will need certain details so make sure you have them to hand. Wife/civil partner's national insurance number, date of birth and the date of marriage.

 

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I was registered blind last year, can I claim the blind persons allowance?

In England and Wales providing you have been registered as severely sight impaired (SSI) and been given a registration number by your local authority you can claim the allowance. Beware because there are two registers and you must be registered SSI. In Scotland and Northern Ireland being registered blind means not being able to undertake any work for which eyesight is essential. The HMRC helpline number is 0300 200 3301. It is possible to backdate the allowance for one year and also to transfer it to your spouse or civil partner if you are not a taxpayer.

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Am I entitled to Marriage Allowance?

Yes, providing your spouse or civil partner is a basic rate tax payer and you have unused personal allowance to transfer. The marriage allowance is calculated as 10% of the basic personal allowance, for 2016/17 this is £1,100. To apply go to www.gov.uk/marriage allowance and follow the prompts. If you are unable to do this digitally contact HMRC on 0300 200 3300  and say 'marriage allowance' when prompted.  You will know when it has been transferred because new tax coding notices will be issued. The recipient's tax code will be prefixed with the letter M, the transferors tax code will be prefixed with the letter 'N'.

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Can I transfer my allowances?

Marriage Allowance -  It is possible for married couples and civil partners to transfer a fixed amount of their personal allowance to the other. Providing the spouse transferring the allowance is not liable to income tax above the basic rate and the recipient is also not liable to income tax above the basic rate.

You can apply online at www.gov.uk/marriage allowance or if you are digitally excluded phone HMRC's main number 0300 200 3300 and say marriage allowance when prompted.

Married Couple's Allowance - If you were married or joined in a civil partnership before 5th December 2005, the married couple's allowance is automatically given to the husband, if on or after 5th December 2005, the MCA is given to the partner with the higher income. Those married or joined in a civil partnership before 5 December 2005 wanting to elect for the new rules to apply to them need to contact HMRC. However, you can also choose to transfer the minimum amount or to transfer surplus allowances.

Transfer of the minimum amount:  It is possible to share the minimum Married Couple's Allowance between you or, if you both agree, you can choose to transfer the whole of the minimum Married Couple's Allowance to your spouse or civil partner. In this case you'll need to complete form 18 - Transferring the Married Couple's Allowance before the start of the tax year.

Transfer of surplus allowances: If a partner has unused MCA in a tax year they can ask for the balance (or ‘surplus’) to be transferred to their spouse or civil partner. The request is made on a form 575 after the end of the tax year.

Both of these transfers are generally executed using a person’s tax code and can become quite complicated. Seek advice if it isn’t clear what is happening.

The blind person’s allowance  - is also transferable between spouses.

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Is attendance allowance taxable?

No, it isn’t.

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Are Pension Credits taxable?

No, they are not taxable

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I am retired but not yet 65, can I claim age allowance?

No, The age allowance ceased in April 2016.  However, you may still be eligible for earlier years if you were born before 6 April 1948 2014/15, 6 April 1938 2015/16 . The entitlement to the allowance was based on age, not personal circumstance, unless your income exceeded 14/15 £27,000 or 15/16 £27,700, when it was reduced by £1 for every £2 of income over the threshold until the allowance was equal to the basic personal allowance 14/15 £10,500, 15/16 £10,660.

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I have heard the age related allowance is changing what is actually happening?

The age allowance will cease on 6th April 2016.

The changes came into play in April 2013 when it was only possible to claim the age related lower allowance if you were born before 6th April 1948 and the higher allowance if you were born before 6th April 1938. Those who already had the allowance were allowed to keep it until the basic personal allowance caught up. From 6 April 2015 you needed to be born before 6 April 1938 to receive the age related allowance and it finally ceases in April 2016.

If you believe you may have been entitled to the allowance in previous years but have not received it or if you believe you may have received it in error you should contact HMRC on 0300 200 3300. If you would like to discuss your situation you can contact Tax Help.

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I have been sent a P800 tax calculation saying that I have an underpayment of tax. I think it is wrong what should I do?

The first thing to do is check the figures carefully. If they are wrong contact HMRC and ask for them to be corrected and see if that removes the underpayment. If you still have an underpayment or the figures are correct, ring Tax Help for advice. They will help you determine the reason for the problem and to see if there has been HMRC or employer error. They will be able to advice you on your rights as a taxpayer and the best way forward. Also see the link to LITRG on the left for further notes on this subject.

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Can you explain the 0% Starting Rate for Savings and the Personal Savings Allowance?

Starting Rate for Savings (SR) - On 6 April 2015 the 10% starting rate was abolished and replaced by the 0% starting rate. The rules for signing an R85, the form used to inform a savings provider to pay interest gross also changed.

The 0% band for 2015/16 & 2016/17 is £5,000. It is restricted by non- savings taxable income so that none of the band will be available if that income is above their personal allowance (& blind person’s allowance if claimed) plus the £5,000 starting rate.

Personal Savings Allowance (PSA) - On 6 April 2016 the Personal Savings Allowance will be introduced, £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate tax payers aren’t eligible.

The two allowances work together and are dependent on your total taxable income.

Interest Paid Gross – From 6 April 2016 savings income will be paid gross (without tax being taken). The R85 will be discontinued.

The easiest way to establish if you qualify is to add up your non savings income, if it is below or within your personal allowance plus £5,000 then the Starting Rate for Savings will apply.

If this doesn’t cover all of your savings income then apply the Personal Savings Allowance. To determine which rate to use add up all of your taxable income including savings income. If it's £43,000 or less then use £1,000, if between £43,001 and £150,000, use £500.

Any savings income over these amounts will be taxable at the appropriate rate and it is your responsibility to inform HMRC. Where possible the amount owed will be collected via your tax code but if this isn’t possible a self-assessment tax return will be required.

Gift Aid alert – People who at present, use the tax they pay on savings as part of their calculation to decide how much they can gift aid need to recalculate. Failure to do so may mean they gift aid too much and may end up with a debt to HMRC.

The following examples for 2106/17 explain the interactions between the SR and the PSA.

Example 1 - Alex is 71 and has non savings income of £11,000. In addition he receives £600 in savings income. His non savings income is below £16,000 and the savings income is within the 0% savings rate of £5000. He doesn’t need to pay tax on his savings and doesn’t have to do anything.

Example 2 - If Alex’s non savings income is £15,600, it is still below the £16,000 threshold and £400 of  his savings income is covered by the 0% savings rate. The remaining £200 is covered by the Personal Savings Allowance. He doesn’t need to pay tax on his savings and doesn’t have to do anything.

Example 3 - If Alex’s non savings income is between £16,000 and £43,000, he will not be eligible for the 0% Starting Rate but his savings income will be covered by the Personal Savings Allowance of £1,000. He doesn’t need to pay tax on his savings and doesn’t have to do anything.

Example 4 - If Alex’s non savings income is between £43,001 and £150,000 he will not be eligible for the 0% starting rate and only £500 of his savings income will be covered by the Personal Savings Allowance. The remaining £100 is taxable at 40% and he will need to contact HMRC to arrange payment.

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Is my savings income taxable?

Income from savings is classed as taxable income, but from 6 April 2016  banks and building societies will no longer take tax before paying it to you and the R85 will be discontinued.  However, some people may still need to pay tax on their savings income where it isn't covered by the Starting rate for savings (£5,000 @ 0%, 2015/16 and 2016/17) or the Personal Savings Allowance (£1,000, 2016/17).

If this is the case for you, contact HMRC to arrange for the tax to be paid.

It is all explained in the FAQ 'Can you explain the 'Starting Rate for Saving's and the 'Personal Savings Allowance'?'

 

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Do I need to pay tax on my Dividends?

The rules are changing in April 2016 when a dividend allowance of £5,000 is being introduced, the tax credit is being abolished. Any dividend payments  above £5,000 will be taxable at either 0%, 7.5%, 32.5% or 38.1% depending on your total taxable income. For example, a person receiving £6,000 in dividends won't pay tax if their total taxable income is under their personal allowance. However, they will pay tax on £1,000 at 7.5% if their total taxable income is between £11,001 and £43,000, at 32.5% on an income between £43,001 and £150,000 and 38.1% on income of £150,001 and over.

Gift Aid alert – People who at present, use their dividend tax credit as part of their calculation to decide how much they can gift aid need to recalculate. Failure to do so may mean they gift aid too much and may end up with a debt to HMRC.

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I think HMRC owe me money, what is the deadline for claiming refunds?

You can claim back overpaid tax for up to 4 years after the end of the tax year. The deadline for;

2011/12 is 5th April 2016.

2012/13 is 5th April 2017.

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How will money I take out of my pension plan be taxed?

If you have taken a trivial commutation from a final salary pension or a small lump sum from any other type of pension it is usually taxed at 20%.

If you have taken a payment under the pension flexibility rules it is slightly different. These payments are usually taxed on 'emergency code'  on a month1 basis, where they will: 

  • take off £917 from the payment which is not taxed, this being 1/12 of the standard personal allowance (£11,000 in 2016/17)
  • tax the next £2,667 at 20%, this being 1/12 of the basic rate tax band (1/12 of £32,000 in 2016/17)
  • tax the next £9,833 at 40%, this being 1/12 of the higher rate tax band (1/12 of £118,000 in 2016/17)
  • Any remaining amount (that is, above £13,417), they will tax at 45%.

If the pension provider were to use a weekly payroll scheme, the yearly figures would be divided by 52 and would mean even more tax was deducted; but most are likely to use a monthly calculation.

In most cases in year refunds are possible and all forms can be found on www.gov.uk, search for the form number or via your personal tax account (register via www.gov.uk/personal tax account). Alternatively contact HMRC on 0300 200 3300.

For both cases, people in self assessment reclaim/pay over/underpaid tax via their tax return at the end of the year.

If you need help to check whether you are due a refund you can call Tax Help on 01308 488066 or 0845 601 3321.

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Can I reclaim tax taken from a one off pension payment?

If you have taken a trivial commutation from a final salary pension or a small lump sum from any other type of pension it is usually taxed at 20%. Check first, to see if you are owed a tax refund, in most cases the tax is correct, but sometimes there is an underpayment. If you are due a refund complete form P53.

If you have taken a payment under the pension flexibility rules it is slightly different. These payments are usually taxed on 'emergency code' which generally takes too much tax. Again check if you are due a refund. There are two scenarios and the form you use depends on whether;

  • you have taken all of the money from your fund - You receive a P45 - Use form P50Z if you have no other PAYE income, use P53Z if you have other PAYE income
  • you take part of your money - HMRC will issue a tax code to the provider for future withdrawals, If you are going to take more money out in this tax year you can't get a refund in year and should wait for HMRC's reconciliation process to receive the refund. If you intend the first payment to be the only one in the tax year you can use form P55 to reclaim any over paid tax

All forms can be found on www.gov.uk, search for the form number or via your personal tax account (register via www.gov.uk/personal tax account). Alternatively contact HMRC on 0300 200 3300.

For both cases, people in self assessment reclaim/pay over/underpaid tax via their tax return at the end of the year.

If you need help to check whether you are due a refund you can call Tax Help on 01308 488066 or 0845 601 3321.

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How much can I give away each year without creating Inheritance Tax implications?

You can give a total of £3000 without any Inheritance Tax implications, in addition £5000 if it is a wedding present to a child, £2500 to a grandchild getting married or £1000 to any other person on their marriage.

If you did not use the £3000 exemption the previous year it can be aggregated with the current year. This only applies for one year so £6000 is the maximum.

Apart from this you may give as many small gifts as you wish, provided they do not total more than £250 per person

Also, you may give larger sums than all those mentioned above but you would need to survive 7 years from the date of the gift for it not to be included in the calculation of your estate.

Another useful exemption is 'normal expenditure out of income'. Lifetime gifts are exempt if they are part of the donor's normal expenditure, made out of income and the donor is left with sufficient income to maintain his or her usual standard of living.

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If I sell my house do I have to pay Capital Gains Tax?

If your house is your home and you have always lived in it, then you do not have to pay Capital Gains Tax.

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Can I give my house to my children and continue to live in it and avoid inheritance tax?

Basically, no. It is possible if you pay a full market rent for your home but then your children are taxable on the rent received. There are very complicated schemes around to avoid inheritance tax on the family home but you should consult a tax specialist and a solicitor before embarking on them.

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Why have I received a tax return?

The HMRC issue returns to people who have untaxed sources of income, for example, rental income, foreign pensions or your state pension as it cannot be taxed at source. From April 2016, people who owe tax on their savings income or dividends may need to file a tax return if the tax due cannot be taken through their tax code.

However, if you are in doubt as to why it has been issued, phone your tax office 0300 200 3300 or, if your household income is below £20,000, ring the Tax Help for Older People helpline 0845 601 3321 or 01308 488066 or use the email link in contact us on this website.

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When does my tax return need to be filed with HMRC?

If you are filing on paper it needs to be with HMRC by the 31st October after the end of the tax year. If filing online it is the 31st January after the end of the tax year. Remember to give the post office time to deliver it and to obtain proof of posting.

For example,  the deadlines for a 2015/16 tax return are;

Paper, 31st October 2016

Online, 31st January 2017

Tax due must be with HMRC by 31st January 2017.

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How long does it take to obtain my Online Filing Password?

If you are thinking of filing an online self assessment you need to make sure you leave time to obtain your activation PIN. It can take up to 7 days so needs to be applied for before the 21st January. The best advice we can offer is to complete your return as soon as you get it.

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I have been sent an email from HMRC saying I have a refund Is this something they do?

No, HMRC never email people about refunds, you may get reminders to do something, but they will never ask you for information or ask you to use a link. It is a scam email and it is important that you do not disclose any personal information. Forward it to phishing@hmrc.gsi.gov.uk and then delete it. HMRC will not reply to you but they will take this seriously and investigate the source.

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Mark Hadley Design