September, 2011

Finding Your Important Tax Information

When submitting your tax return, starting a new job or enquiring about your tax and other benefits you’re likely to need certain pieces of information.  These may include your National Insurance number, your Unique Taxpayer Reference (UTR) number or your tax code.

If you’ve mislaid any of this information, our guide will help you find it.

Finding your National Insurance Number

If you can’t remember your National Insurance number or you’ve lost your National Insurance number card, you may be able to find it on some of your official paperwork.  You can often find your National Insurance number on:

  • Your payslip
  • A copy of your Self Assessment tax return
  • Your P60 (end of year tax statement)

If you still can’t find your National Insurance number, you can ask HM Revenue and Customs (HMRC) to confirm it to you.  You can do this by calling the National Insurance Registrations Helpline (on 0845 915 7006) or completing and returning a CA5403 form.

HMRC will confirm your National Insurance number by post.

Finding your Tax Code

If you’re employed or between jobs, you’ll find your tax code on your P45 (the statement of earnings/tax you receive when you leave an employer).  You will also find your tax code on your ‘PAYE Coding Notice’, usually sent to you by HMRC before the start of each tax year.

If you’ve lost your P45 and want to find out your tax code you should contact HMRC and give them your National Insurance number and tax reference number (see below).

If you’re starting your first job, your employer will ask you for the relevant information to allocate a tax code and work out the tax due on your wages.  HMRC will then process the information passed on from your employer and, where necessary, revise or issue you with a tax code.

If you get a company or personal pension, you’ll find your tax code on your PAYE Coding Notice.  You’ll also find your tax code on notices and payslips from your pension provider.

Finding your Unique Taxpayer Reference (UTR) Number

Your UTR number is a unique number provided by HMRC so that you can complete your tax return.  It has ten digits (for example, 15863 35637) and it is used by HMRC to identify you.

If you can’t remember what your UTR number is, you can normally find it on:

  • Your tax return – your UTR number should be on your tax return
  • Your ‘Welcome to Self Assessment’ letter (SA250). This letter also explains how your UTR number is used
  • Your ‘Notice to File a Tax Return’ – if you submit your tax return online, you should receive a reminder that your self assessment tax return is due.  Your UTR number will be found on this Notice to File document
  • Your ‘Statement of Account’ – your UTR will also appear on your HMRC statement

You will often also find your UTR number on other formal correspondence that you receive from HMRC such as a payment reminder.

Introduction to Tax Credits

Tax credits are available in the UK if you are on a low income or if you are responsible for a child.  There are two main types of tax credit:

  • Working Tax Credit
  • Child Tax Credit

Many people are eligible for both types of tax credits, which are non-taxable payments made to you by the government.

Here, we look at what tax credits are available and who is eligible to receive them.

Are you eligible for tax credits?

According to HM Revenue and Customs (HMRC), nine out of ten families with children qualify for tax credits.  Even if you don’t have any children, you may still be eligible to claim if you’re on a low income.

Child Tax Credit is paid if you are responsible for at least one child, and you don’t necessarily have to be working to claim.  Working Tax Credit is paid based on the hours that you work and on your income.

What tax credits could I receive?

The amount of tax credits that you can claim differs from person to person and depends on a number of factors including:

  • How many hours a week you work
  • How many children live with you
  • If you live with a spouse or partner
  • If you pay childcare costs
  • Your income

What do I need to earn to claim tax credits?

Tax credits are aimed to support people with lower earnings and so there are annual income limits that generally apply.  Your tax credits may be reduced or stopped if you earn over:

  • £41,300 – if you have children
  • £12,900 – if you are single without children
  • £17,700 – if you are a couple without children

Only by making a formal tax credits claim will you be able to determine exactly what you are entitled to.  There are other factors that can be taken into account (such as the costs of childcare) and you may be entitled to more tax credits.

The entitlement limits and amount of tax credits paid also generally change every year and so the figures may be different in future years.

How Your Savings Are Taxed

When you receive interest on your savings, it is normally paid to you net of tax at the basic rate (20 per cent).  So, if you’re on a low income you may be able to claim this tax back.  Conversely, if you’re a higher/additional rate taxpayer then you may have to pay some additional tax.

Our guide looks at how your savings are taxed.

How your savings income is taxed

The income you receive from your savings is added to your other income.  You then pay tax after your tax-free allowances – for example Personal Allowance – have been taken into account.  This works as follows (for the 2011/12 tax year):

  • Taxable savings income that falls within the £2,560 starting rate for savings Income Tax band is taxed at 10 per cent (but only if the rate band has not been used up by other income as savings income is taxed last)
  • Taxable savings income (included with your other income) between the £2,560 starting rate for savings Income Tax band and the upper £35,000 basic rate band is taxed at 20 per cent
  • Taxable savings income (included with any other income) between the £35,000 higher rate Income Tax band and the £150,000 additional rate band, is taxed at 40 per cent
  • Taxable savings income (included with any other income) over the £150,000 Income Tax band, is taxed at 50 per cent

Generally, your savings interest will be paid after 20 per cent tax has been deducted.  This shows on your statement or in your passbook as ‘net interest’.

If the entry says ‘gross interest’ then no tax has been taken off.

Reclaiming tax if you’re a non-taxpayer

If your income means you don’t have to pay tax you can register for gross interest.  You do this by completing an R85 form (called ‘Getting your interest without tax taken off’).  If you’ve already paid tax you will be able to claim it back.

Reclaiming tax if your non savings income is under £2,560

If your non-savings income is less than the starting rate for savings limit (£2,560 in tax year 2011/12) or if savings and investments are your only source of income – your savings income is taxable at a rate of 10 per cent up to the £2,560 limit.

As your interest will have been taxed at 20 per cent you will be able to claim part of the tax back.

Paying tax if you are a basic rate taxpayer

If you pay basic rate tax at 20 per cent, you will have paid the correct amount of tax on your savings income.

Paying additional tax if you’re a higher rate taxpayer

If you pay the higher rate of tax you will have to tell HMRC about your savings income.  You normally do this by Self Assessment or by completing a P810 form so HMRC know exactly what savings income you receive.

You will have to pay the additional tax on your savings interest.

Paying additional tax if you’re an additional rate taxpayer

Additional rate taxpayers complete a Self Assessment form.  So, you should declare all your savings income on this form in order that HMRC can claim the additional tax due on this interest.

What Everyone Should Know About Your P45

Are you an employee who has stopped working for an employer?

If so, you are entitled to receive a P45 form from your previous employer.  Whether you resigned, left to work for another employer or you were made redundant, your previous employer should have provided you with a P45 form when you left.

Our guide tells you everything that you need to know about your P45.

What is a P45 and what information does it contain?

You receive a P45 from your employer when you stop working for them.  It is a form which details a full record of your earnings and any tax that has been deducted from it in the current tax year.

Your P45 shows:

  • The date you left your employer
  • Your tax code
  • Your PAYE reference number
  • Your total earnings from that employment in the current tax year
  • How much tax was deducted from your earnings in that tax year
  • Your National Insurance Number

The four parts of your P45

Your P45 will come in four parts.

Part 1

Part 1 of your P45 will be sent to HM Revenue and Customs (HMRC) by your employer.  The remaining parts – parts 1A, 2 and 3 will be given to you.

Part 1A

You keep part 1A for your own records.

Parts 2 and 3

When you start to claim Jobseeker’s Allowance, or when you start with a new employer, you give Parts 2 and 3 to the Jobcentre or to your new employer.

Make sure that you look after your P45 as if you lose it, you won’t be able to get a replacement.   If you have lost your P45, your new employer may give you a P46 form to complete or ask you for the relevant information.  This is so they can pass these details on to HMRC in order that that they can give you a tax code for your new employment.

The law

Remember, that your employer should give you a P45 as a matter of course when you leave their employment.  You are entitled to a P45 by law and so don’t be fobbed off by your employer.