Tax Codes

Discussion in 'Royal Naval Reserve (RNR)' started by itsamuppet, Jan 14, 2008.

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  1. Does anyone out there know if we are exempt paying the higher rate of tax on our RNR pay if we pay it on our full time jobs, or if we have to pay it on both?

    I have contacted my UPO but they've told me to contact my tax office, who from previous experience will not investigate it any further than taking vast sums of money off me.

    Also I have heard that we shouldn't pay NI on a second job, is this true.

    Bring back the chief writer
     
  2. Not sure on that one ITSA but whilst talking about tax codes you, and others, may not be aware that you may be entitled to a tax offset in relation to uniform cleaning.

    Where an employer requires you to wear a uniform and does not provide a cleaning service for that uniform (ie you have to take it home and chuck it in your washing machine yourself) there is a tax offset available that can be BACK CLAIMED FOR 6 YEARS.

    May be worth a try if you are going to try and get a bit back.
     
  3. Nah .. Unfortunately HM Inspector of Taxes doesn't care where you get dosh from .. he just want's his bite .. if your bounty takes you over the tax theshold then you pay the higher rate on that portion - end result you can actually end up paying 2 rates of tax. Same applies to pensioners who are still working .. i.e. me .. get wacked for tax on my wages which are below the threshold but when the pensh comes in index linked at the end of the year it will push my gross earnings over the threshold so I will end up paying higher rate on the portion over the threshold. Yes you can get a uniform offset if you have to launder it yourself. Most Nurses get that - also any bona fida professional journals or professional membership subscriptions you pay you can claim back. (dont think Navy News counts though!!! lol) If yu write to the tax office and ask tell them that your IN number and tell them that you have to wear uniform that you have to launder yourself and you are claiming for the last 6 tax years they will make the necessary adjustments!

    Hope this is helpful
     
  4. Asked this once Myself
    Was told by the CPOWTR (those were the days!!) That the only tax codes used were NT (Not Taxed, ie those that had filled in a P38, students etc) and BR (Basic Rate).
    He told me that if my RNR pay pushed me over the threshold for higher rate tax then I needed to declare it to the Inland Revenue myself through a self assessment form.
    (Edited to add)
    NI threshold is £670 PW, rising to £770 PW 2008-09. If your RNR pays takes you over this, you can claim the difference back.
    http://www.hmrc.gov.uk/rates/nic.htm
     
  5. I am led to believe that although your pay can take you over the threshold, your bounty is a tax-free bonus and therefore should be exempt.

    Happy to stand corrected.
     
  6. Use self assessment, it's quite straightforward.
     
  7. You could be right! But do you get any other payments for playing with the weekend warriors other than a tax free bounty??? .. because if it was all tax free then they's all be at it!
     
  8. If you are into higher rate tax then all your income will be subject to that regardless of where it comes from and NI is payable on all jobs that you have.
     
  9. One of the things to watch for would be mileage, if a real world job involves a lot of driving.

    the mileage rate drops considerably at 10k miles, but the RN only pays at the low rate anyway, so it needs a bit of thinking about.
     
  10. FlagWagger

    FlagWagger Book Reviewer

    This can work both ways: if you drive less than the 10k miles per annum, and you are paid less than the HMRC rates (45 p / mile I think) then you can claim the difference as a tax allowance.
     
  11. Many thanks for this. only reason i asked is because i had a long term run in with the IR following call up in 2003 where they owed me and then I owed them and they finally ended up owing me and at no point did they take into consideration my different tax codes, even with all my pay information in front of them and also being over the higher limit.

    The big question is do i ask for the extra NI payments back which I've made or do I keep mum and just advise them that I might need to pay higher on my RNR from now on and get. Any clever accountant types out there with advice.

    I can't believe I'm the only one falling into the trap with this one and with the demise of UPO's and experienced writers, could we perhaps have a Signal or memo from above to highlight this and give advice on whom to contact???
     
  12. When I was in both the ROC & RNXS we paid no tax on our remuneration which took the form, in both cases, of a uniform upkeep allowance and pay (during exercises). Mind you that was in the 1980s!
     
  13. When I was in both the ROC & RNXS we paid no tax on our remuneration which took the form, in both cases, of a uniform upkeep allowance, travel allowance (warrents for journeys to Commcen) and pay (during exercises). Mind you that was in the 1980s!
     
  14. The dosh you get from the RNR (except your bounty - which, as said above, is tax free) is treated as a seconed income. It is almost impossible to get the Tax office to charge you the correct rate of tax, ie 40% on all earnings from your 2nd income that falls on the "wrong" side of the 40% threshold. You have 2 choices, ask for a self assessment or keep stum, and put the difference in a high interest account until (if) the tax man catches up with you.
    An advantage of the self assessment is that you are able to claim back a % of the difference between the 22pence? a mile that pusser gives you for your duty trips, and the 40 pence that the IR believe you should have (This is only for the 1st 10,000 miles per year). That % is 40% of 18p if a higher tax payer, or 22%? if a lower. - and you can claim back the last 7 years. Depending on how much you earn over the 40% threshold and how many duty miles you do a year, they often offset eachother -

    As for NI - the NI/tax office, again have great difficulty in applying the correct NI rate to a 2nd income, so they invariably deduct it from the 2nd (RNR) income as if it is your only income. As there is an upper limit after which NI contributions are no longer required, you could end up paying more NI than you should - your action to correct this is to phone your NI office, explain and they ask for a form or a letter (not difficult) and you get a refund!

    Long and a bit complicated - sorry - but you will probably find it fairly accurate.
    Good luck
     
  15. I used to fill in a self-assessment form every year. The Revenue would then decide that either I owed them a few quid or they owed me a few quid. They got bored of the game a couple of years ago and wrote to tell me that I didn't need to self-assess any more as the amount extra I might have to pay was less than the cost of working it out.

    On the subject of NI, I get a letter every year from those nice people up in Tyne and Wear telling me that I paid too much NI (there is an upper limit) from 2 years ago and including a cheque for the overpayment. I've never had to ask them for it - they just work it out and send it.
     
  16. Is there any way to get the records of training attended whilst in the RNR.

    I've been in for nearly 7 years and have never claimed back the tax on the mileage i do for training. I've done thousands in my time in so it would be worth my while looking into it but how do i get the info?
     
  17. You don't need cast iron proof of each journey you made, what you do need, is the ability (if, and only if, the IR audit you) to show that you made the journey.
    You can get a print off of you training from your UPO (if it still exisits)
    If not, you can use your pay stats, and intelligently use them to remind you roughly what each payment was for, and where. Then you can find out from auto route or a web application, the milage that you travelled.
    Add it all up, and that's the milage you can claim back 40% of 18 pence for each mile.

    Failing that you can always make an educated guess of where you went - but err on the low side, you don't want to commit fraud.

    Once you have the number of miles, there is a section in the self assement form to actually do the mechanics.

    Good luck
     
  18. Dont forget, it's not just this year and beyond, you can back claim up to 6 years, which they will pay as a lump sum
     
  19. Awsome
    Thanks - that's 980 pounds coming my way
     

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