maxb

@yolondon Option c) is correct, and the lump sums to which the 30k exemption applies are mainly those that are compensation for e.g. loss of employment, redundancy, etc. A bonus, whether initial or annual, is still part of normal employment earnings, a position reinforced by it being included within the P60. Fuller, painstakingly elaborate details can be found within various parts of the EIM series of HMRC manuals if you care to review the source material more closely, though they make for a difficult read as there are so many references to other pages that need to be followed to understand what you are reading. Option b) would see you taxed twice on the same income. A distinct problem with option a) is that figures making up your P60 will already have been independently sent to HMRC by your employer - I don't know if they would pick up on the discrepancy if you submitted different figures yourself or not, but it's a possibility.

The document "How to fill in your tax return" downloadable from https://www.gov.uk/government/publications/self-assessment-tax-return-sa100 tells you at the end of page 6 and start of page 7, to calculate the amount as 1 week of the old weekly amount plus 51 weeks of the new weekly amount, in most cases.

@Bear If you know you need to submit a tax return, it doesn't really matter whether your tax codes were correct or not, as the tax return calculation is going to look back over the entire year anyway, and calculate a balancing payment or refund. This will correct for any omitted or excessive PAYE deduction. Lots of people show up on this forum unduly focused on the tax code, but the tax code is only a means to control the PAYE process during the year, often based on estimates. Once the year has ended, if you are completing a tax return, it is what determines what tax you actually pay. Make sure to include the claim for the amount of professional fees you actually paid in your return.

@Anthony The detail you aren't accounting for in your example, is that since your salary has been reduced by salary sacrifice, more of your basic rate band is left available to apply to your £20k other income. Colleague: £55k taxable salary, £50270 to £55k charged at 40% tax You: (£35k taxable salary plus £20k other income) = £55k total taxable income, £50270 to £55k charged at 40% tax Same position in each case.

It sounds like you reduced your 23/24 payments on account below the total amount of tax you were actually finally liable for in 23/24 - however that isn't allowed. If you do it anyway, the reduction below your actual tax liability is undone, and you are held to be late paying the amounts of the payments on account from when they were originally due. It's a misunderstanding to think the 31st January of the following year deadline can be applied to your entire tax bill once payments on account have been issued. Essentially, the problem is that rather than reducing payments on account to avoid paying tax which will only be refunded later (allowed), you used the reduction to optimise your cash flow to defer paying tax actually due (not allowed). By the time of the second payment on account for 23/24, in July 2024, the 23/24 tax year is already finished, so you should have received all of the income on which you are being taxed at that point - and also enough information to calculate your total tax due for 23/24 to know how much, if any, you can reduce payments on account without penalty. If you have cash flow difficulties with paying the tax from the income on which it arose, https://www.gov.uk/difficulties-paying-hmrc may be relevant.

If you look at the total earnings shown on your P60, I expect you'll find the taxable value of the benefit has already been included within that figure, in addition to your gross salary. That's how it gets accounted for, without a P11D.

Here is a possible reason why what you have mentioned could have happened: When you started employment in January, you may have been given a PAYE tax code which instructed your employer to calculate your tax free amount only based on the months they were actually paying you. If so, now you are filling in Self Assessment, it is looking back over the entire year, and finding you have unused Personal Allowance within the whole year which can be set against your employment earnings - meaning you would have paid more tax than is due, and can get it back.

In previous years, I have noticed that there is a bug in the HMRC website's display of the "full calculation" - if you have dividend income that is small enough to fit within 0% dividend band, it doesn't show the dividend section or subsequent sections at all! This can be a problem, as even if dividends are taxed at 0%, they still affect the calculation by taking up space in bands which can affect how other income is taxed. This might be making the subtle cases being discussed in this thread even harder to understand.

@Kingsley Packer: Since you invested in tax year 2023/24, the rules say you can claim against tax due in that year, or you can treat the investment as if it occurred the previous year, claiming against tax due in 2022/23. You can't claim against tax due in other years. I'm not sure whether you're asking because you don't have enough tax due in 2023/24 to make use of all the relief, or if you're asking whether you can claim on future years tax returns to avoid being forced to make a separate paper claim... If the latter, you can't claim on future years tax returns, *but* if you receive the certificates whilst your tax return for a previous year, that you want to claim against, is still accepting amendments, it can be very convenient to just amend your previously submitted return to include the additional EIS relief, instead of needing to follow the paper claim form process.

@Vladimir Sovetkin: Since you invested during tax year 2021/22, your choices are to claim the relief against tax due in 2021/22, or the year before, 2020/21 - not any other years.