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IS INCOME TAX
A PROBLEM? |
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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 at least – appear to be something of a bargain! |
WHY NOT ALSO VISIT THESE PAGES |
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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. 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 Allowances
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.
Dividends
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. Double Taxation
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. Rents
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. Foreign Residence
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 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
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
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. Martins Bank Income Tax Departments
HEAD OFFICE: 4 WATER STREET, LIVERPOOL 2
MAY
1967
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