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October Question and Answer Corner
Newsletter issue - October 2009.
Q. My payroll clerk accidentally overpaid the PAYE payable by my company for 2008/09. I have rung the PAYE office, but they refuse to repay the amount or reallocate it to another period. What can I do to get the money back?
A. Ask the PAYE office for the overpayment review form P35D. Complete this with as much information about how the mistake in overpaying arose, and send it back. If the repayment doesn’t arrive, chase by phone, and make a note of exactly who you speak to, and what they say. If no repayment is forthcoming, consider making a formal complaint to HMRC.
Q. I’ve received a new PAYE coding notice that shows tax is due on a negative figure. What does this mean?
A. A negative PAYE code, or ‘K’ code (due to the letter K used), means your personal allowances for the tax year are less than untaxed income and benefits which have been included in the code. Your employer or pension provider will add the negative figure from this code to your annual income rather than deducting it, as they would with a normal PAYE code. However, please check that all your allowances are included in the code. If you are married and were born before 6 April 1935 you may be due a married couples’ allowance. In some cases the married couples’ allowance has been missed from PAYE codes issued since 1 July 2009. If this applies to you, ring the Tax Office number shown on your coding notice, or ask us to check your code for you.
Q. My elderly aunt wants to give me a seaside chalet, which she inherited when her mother died in 1985. If I accept this gift will I have to pay tax on it?
A. You won’t have to pay any tax when you take ownership of the property. However, your aunt should declare the gift on her tax return. If the increase in value in the property between the 1985 value when she inherited it and its value when the property passes to you, is greater than her annual capital gains exemption (currently £10,100), she will have to pay capital gains tax at 18% on any excess above the unused exemption amount. The value of the chalet at the date of the gift could also be subject to inheritance tax at 40%, if your aunt dies within seven years of making the gift. However, inheritance tax will only apply if the value of your aunt’s total estate on death, plus all the capital gifts she has made in the previous seven years, exceeds the IHT exempt band. This is currently £325,000, and will rise to £350,000 on 6 April 2010. This exempt band could be doubled if your aunt is a widow when she dies.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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