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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4340
Experience:  FCCA FCMA CGMA ACIS
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The Taxable income shown on my Annual Tax Summary is higher

Customer Question

The Taxable income shown on my Annual Tax Summary is higher than I thought. I have a State Pension and a Private Pension which is less than the sum stated. Apart from these, I have several Funds and Isa's etc. paying me dividends but I thought that these payments were after tax deducted and therefore not part of the tax calculation. I also notice that my Savings Account which is in joint names and my Nationwide Isa also is paid to me with tax deducted. I am a bit confused.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
I am not surprised, ISAs are not taxable! Only half the interest on your Savings Account is attributable to you, the other half to the other Joint Holder. However, Funds may be taxable, but have presumably been paid with tax deducted as will dividends with their 10% notional tax.
State Pensions are taxable, but paid gross. The normal treatment is for the code number on your Private Pension to be reduced to recover the tax on the State Pension which was paid gross thus making you tax neutral at the year end. You should always check code numbers when they are issued to make sure they are correct.
What you need to do now is to carefully check the Summary and appeal against it where there are errors. This is done simply by writing a letter to your tax office drawing their attention to the discrepancies and asking for them to be corrected. Remember HMRC send out simply thousands of wrong statements and code numbers each year.
I do hope that I have shown you a way forward with this matter.