We are indebted to Friend of the Archive Allan Rooks, for so carefully preserving and making available to us, another of Martins’ product leaflets. This one focusses on the work of the Bank’s INCOME TAX DEPARTMENTS, - the various services offered by the bank to those in need of tax advice. It is May 1967 – The Beatles might have been friendly with Harold Wilson, but the 1965 Finance Act doesn’t endear the Labour government to everyone. In an attempt to make things a little bit clearer than mud, Martins offers this handy guide, along with the services of its tax departments, whose charges – by today’s standards – appear to be something of a bargain!
WHY NOT ALSO VISIT THESE PAGES
Taxing times ahead…
HOW do I know my Code Number is right? Can I be certain that I get all the allowances I am entitled to? If I sell my holiday bungalow, how much Capital Gains Tax will I have to pay? How much tax will I have to pay on my wife's part-time earnings? Can I recover any tax on my dividends from the USA? Very likely you have wondered yourself about questions like these. With Income Tax becoming more complicated every year, thousands of ordinary people in every walk of life find themselves faced with similar problems. And a great many of these problems are solved with the help of Martins Bank. Whether you have a large income or only modest means, you could benefit from the help Martins can give you. Nor will you find it expensive. Whatever your position, you could find it very well worth while seeing how Martins could help. This booklet explains some of the most frequently asked-about points concerning personal Income Tax. If you would like to know more, the Manager of your Branch will be happy to help you.
Pay As You Earn
Many people believe that deduction of tax from wages and salaries under P.A.Y.E. means that there is no need for them to concern themselves about their Income Tax. But the taxpayer’s Code Number is simply an instruction to an employer g to enable the weekly or monthly tax deductions to ; be calculated. The Inland Revenue arrive at the Code Number from the Income Tax Return which you submit, and it is very desirable to make sure that the Return includes claims for all the allowances to which you are entitled and that the Notice of Coding takes account of them all in arriving at your Code Number. Many factors can affect the Code Number, and, as a result, the amount of tax you have to pay. For example, changes in domestic circumstances can affect your tax liability, and since the Inland Revenue do not automatically ask for an Income Tax Return every year, you could pay too much tax if you do not tell the Inland Revenue about such changes. In matters like these, expert, friendly assistance is particularly valuable, and never more so than with today’s high rates of taxation.
Claims for allowances and repayment of tax
It is possible to claim for a large number of tax allowances which are intended to prevent the burden of taxation from falling too heavily on people with moderate incomes. These allowances are also designed to take account of differing family circumstances. The following are some of the allowances and reliefs at present available under the Income Tax Act and various Finance Acts.
personal relief Allowances for single people and married couples differ. In addition, certain extra allowances are given where the wife is working. It is important to see that proper allowances are granted in the year in which a marriage takes place.
earned income relief This is a further allowance granted on earned income. The amount of the allowance can be affected by various factors such as mortgage interest or payments under a Deed of Covenant.
children’s allowances These vary according to the age and income (if any) of the child. When the child is over 16 and is receiving full-time education, account must also be taken of part-time earnings the child may have during holiday periods.
dependent relatives An allowance can be granted when a taxpayer helps to maintain a relative of himself or his wife when the relative has only a small income. It may be desirable to obtain advice regarding the conditions which enable a taxpayer to qualify for such an allowance.
other allowances A number of other allowances may be claimed, covering, for example, adopted children, a housekeeper, daughter’s services, life insurances, and relief for taxpayers whose total income is small and is derived entirely from investments. Martins can advise on all these.
Taxpayers who receive income from dividends may well be eligible for a refund of Income Tax. Such claims are not as straightforward as they may at first seem, and there are rules to be applied which can make it difficult for the taxpayer to be certain that he is receiving the full refund to which he is entitled. It is quite commonly believed that because Income Tax is deducted at the standard rate from dividends, there is no need to declare the income from dividends on the Income Tax Return. This is incorrect: the Return calls for a complete statement of income from all sources. By not giving information about dividends, the taxpayer may lose certain reliefs and allowances which he might otherwise receive.
The legislation governing tax payable on income received from certain overseas countries makes it particularly desirable that those receiving such income make sure they are obtaining the full relief due to them. The final tax liability of residents in the Channel Islands and the Isle of Man calls for special consideration. It is also important that the tax liability on income from Commonwealth and foreign dividends is carefully verified in view of the various taxation agreements which exist between Great Britain and many overseas countries.
With the abolition of Schedule “A” Tax, a new method of taxing income from rents has been devised and it is therefore important that all the deductions which may be claimed under the new system are correctly allowed.
Capital Gains Tax
The Finance Act of 1965 greatly extended the field of Capital Gains Tax and the application of the provisions of this Act is complicated, affecting as they do a wide range of everyday transactions. Considerable research is necessary when investments are sold in order to arrive at the correct profit or loss figure, and taxpayers who have investments, whether large or small, should seek professional advice regarding the tax position when contemplating changes in their portfolios.
Many people believe that Surtax is not payable unless the taxpayer’s income exceeds £5,000. This is true only where the whole of the income is from earnings. A “mixed income”, consisting of salary and dividends, may well attract Surtax where the total income is above £2,000.
The tax position of a British subject who is not resident in the United Kingdom is seldom fully understood and in most cases expert advice should be obtained. In particular, the question of remittances from salaries earned abroad presents difficulties which can prove costly if advice is not sought at an early stage.
Claims by Residents Abroad
British subjects (and certain foreign nationals) who live abroad can claim some repayment of United Kingdom Income Tax which has been deducted from their United Kingdom dividends. Specialist assistance is often valuable with such claims, as involved correspondence may arise, presenting considerable problems for a resident abroad.
It’s surprising what Martins will do to help you
The Income Tax Department of Martins Bank specialises in personal Income Tax, Surtax and Capital Gains Tax, including the preparation of returns and claims, the computation of income from rents and the figures to be used in Capital Gains Tax calculations. Through a series of branch offices, the services of the Department are available to serve those who seek advice on personal Income Tax matters, but it is emphasised that in providing this service the Bank does not seek to obtain business already attended to by a member of one of the recognised professional bodies.
When a customer seeks the advice of Martins Bank on tax matters, the Department’s experts have the unique advantage of ready access to almost all the information needed for the returns and claims of a private client—the banking account for details of payments and receipts under various headings, dividend counterfoils, Security Registers and Stock Exchange transactions—as well as having an understanding of the customer’s financial position.
When the Bank is entrusted with the tax affairs of an individual, details of investments and financial matters in general are recorded year by year and are readily available when required. These records may be invaluable in other ways. In the case of death, for example, they can be of great help to executors, who are relieved of the need to trouble the family and beneficiaries with many enquiries.
Deeds of Covenant
The Bank can assist in the administration of Deeds of Covenant schemes in connection with recognised Charities.
Fees generally are based on the amount of work involved and the responsibility carried, so that it is not possible to quote an exact figure until all the facts are known, particularly where relative to the preparation and rendering of returns. However, where the fee relates to the making of a claim, it will not usually exceed 10% of the amount recovered or saved, subject to a minimum fee of £3 3s. od.
Where this fee would be disproportionate to the work involved, an adjustment may be made. This table may provide a general indication of the level of fees charged. For incomes in excess of £3,000 the fee will be fixed by arrangement. If you would like to know more about how Martins Bank could help you, the Manager of your Branch will be pleased to advise you.
Income Tax Departments
HEAD OFFICE: 4 WATER STREET, LIVERPOOL 2