Re: The real cost of triple lock
Posted: November 23rd, 2023, 9:02 pm
mc2fool wrote:Lootman wrote:My tax bill for last year was about £4,500 and I am not under PAYE at all and have not been for about a quarter century!
No payment on account is required, or my accountant would have told me. And HMRC seem perfectly happy with me because I have been paying taxes this way since at least 2009!
The cheque is for the tax due as determined by my SA return for that year.
I believe the reason for the exception is to do with the fact that most of my tax due is CGT and that is considered separately from income for this purpose.
Yes, I did say it applied if your last income tax bill was at least £1000, and of course there is no PAYE for CGT, so your point about preferring to handle it manually rather than via PAYE is moot for your case anyway.
Not entirely moot. If I structured my affairs differently I probably would be sucked into payment by account, and possibly even into PAYE.
For example I keep my dividends very low by basically investing in securities that pay little or no dividends e.g. Berkshire Hathaway (my largest taxable position) and Scottish Mortgage. I am a LYP investor, if you like. I also use options a fair amount, which do not attract income tax on the profits.
I deferred a couple of pensions.
I also use premium bonds and gilts trading below par for tax-free "interest". And so on.
That way I can stay within various allowances and nil-rate bands, and avoid PAYE, tax withholding and payment on account.