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I receive superannuation from the Isle of Man and used to pay

Resolved Question:

I receive superannuation from the Isle of Man and used to pay tax to the IOM government. They informed me that this was no longer possible due to new EU regulation and gave me a refund of approx £5000. Is this declarable to HMRC?

In future can I ask HMRC to use my tax free allowance for my superannuation and pay normal tax on my part time earnings.

Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
HI

Thanks for your question, My name is XXXXX XXXXX I am one of the UK tax experts here on Just Answer.

I assume that you have been declaring the superannuation to HMRC (along with the tax suffered) or are not a UK domicile and have opted to be taxed under the remittance basis?

If you have been declaring this superannuation and foreign tax suffered , then this "refund" of tax, yes needs to be declared, in the form of you amending the figures previously submitted to HMRC - so they can rework your UK tax liability.
f you are non domicile - then I assume up to now the income has not entered into the UK - and you have either lost personal allowances and/or been subjected to a remittance basis charge - and if this income/refund has been received to you in the UK, then this needs declaring in this tax years position, so alert HMRC of this, if you do not complete a self assessment tax return - if you do complete a tax return then declare this under other income detailing its origin.

Thanks

Sam
Customer: replied 3 years ago.

For my future tax, am I able to request HMRC use my personal allowance to cover my superannuation and tax me normally on my part time work?

Expert:  Sam replied 3 years ago.
Hi Iain

Thanks for your response

The difficulty with that is that HMRC can not operate PAYE against your superannuation as not arising in the UK so its only against the employment that tax can be paid.

You could ask for tax code BR (20%) to be charged fully against your employment and then benefit from the award of personal allowances at the end of the tax year. This may go some way to lessening the full tax burden at the year end.
OR ask for HMRC to include enough of the superannuation to utilise all your personal allowances, and if there is a shortfall, they can then continue to deduct up to 50% of the part time employment as tax.
If you could advise
1) The annual superannuation amount
2) Your part time income figure
3) Whether you are under 65 or over 65

Then I can make a calculation for you - to use as a request to HMRC

Thanks

Sam




Customer: replied 3 years ago.

Superannuation - £8355


 


P/T income - £5000


 


Under 65

Expert:  Sam replied 3 years ago.
Hi

Thanks for your response and the additional information

You should ask HMRC to include ALL of the superannuation in your tax code and as you are awarded (currently) £9440 less the superannuation of £8355 - which will leave you £1085 allowances code 108T

Then the first £1085 of the P/T employment will be tax free leaving £3915 at 20% = £783 tax a year
So monthly this would work out per month at £416.66 gross with £90.41 tax free - and the remaining £326.25 liable to tax - so you will pay £65.25 tax
So take home pay £351.41

Thanks

Sam
Sam, Accountant
Category: Tax
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