Social Charges on UK Investment & Savings Update (if your interested)

[parsnips]

[quote user="pomme"]If the tax offices are sending Avis Rectificatif, it sounds as though they are going back and redoing the calculations completely. So the part of the CSG which is deductible from the following year’s taxable income will also be removed. That could result in a higher income tax bill and the total refund not being as high as the CSG refund claim made.[/quote]

Hi,

 I don't see how you come to that conclusion.  The CSG deductible is only a fraction of the CSG paid which is deducted  only from the following years taxable income (and so has a marginal effect on income tax only) , but not from the  gross investment income which up till now all remained subject to CSG.   As , hopefully , no CSG at all will be taken for the years concerned , I fail to see how one can fail to be better off.

[pomme]

[quote user="parsnips"][quote user="pomme"]If the tax offices are sending Avis Rectificatif, it sounds as though they are going back and redoing the calculations completely. So the part of the CSG which is deductible from the following year’s taxable income will also be removed. That could result in a higher income tax bill and the total refund not being as high as the CSG refund claim made.[/quote]

Hi,

 I don't see how you come to that conclusion.  The CSG deductible is only a fraction of the CSG paid which is deducted  only from the following years taxable income (and so has a marginal effect on income tax only) , but not from the  gross investment income which up till now all remained subject to CSG.   As , hopefully , no CSG at all will be taken for the years concerned , I fail to see how one can fail to be better off.

[/quote]

That was what I said but, as a result of the CSG credit being removed in the income tax calculation, the net income on which tax is charged could be higher. So the refund would only be the CSG less the difference between the original income tax charges and the revised calculated figure not the CSG claimed back.

In my case, because I sold a significant investment, the 2013 CSG charge was a five figure amount. The credit applied in 2014 was a significant four-figure sum and deducting that (and the other credits) brought my income down below the lowest tax band. As a result I ended up not paying any income tax in 2014. I suspect, if the CSG credit is added back in to my income, it will bring me back into the taxable income bands.

[parsnips]

[quote user="pomme"][quote user="parsnips"][quote user="pomme"]If the tax offices are sending Avis Rectificatif, it sounds as though they are going back and redoing the calculations completely. So the part of the CSG which is deductible from the following year’s taxable income will also be removed. That could result in a higher income tax bill and the total refund not being as high as the CSG refund claim made.[/quote]

Hi,

 I don't see how you come to that conclusion.  The CSG deductible is only a fraction of the CSG paid which is deducted  only from the following years taxable income (and so has a marginal effect on income tax only) , but not from the  gross investment income which up till now all remained subject to CSG.   As , hopefully , no CSG at all will be taken for the years concerned , I fail to see how one can fail to be better off.

[/quote]

That was what I said but, as a result of the CSG credit being removed in the income tax calculation, the net income on which tax is charged could be higher. So the refund would only be the CSG less the difference between the original income tax charges and the revised calculated figure not the CSG claimed back.

In my case, because I sold a significant investment, the 2013 CSG charge was a five figure amount. The credit applied in 2014 was a significant four-figure sum and deducting that (and the other credits) brought my income down below the lowest tax band. As a result I ended up not paying any income tax in 2014. I suspect, if the CSG credit is added back in to my income, it will bring me back into the taxable income bands.[/quote]

Hi,

   But if, as you say, the CSG charge (which hopefully will be refunded) was 5 figures and the credit against taxable income was only  4 figures,  then  even if the whole credit is wiped out and all the increased taxable income subject to 14  %  tax it will still be significantly less than the 5 figure refund.

[pomme]

I didn't say it wouldn't.

All I said is was, if they are doing complete reassessments rather than just refunding CSG paid, not necessarily to expect the refund to be the amount of CSG you might have claimed as there could be deductions because the CSG refund causes an increase in income tax: " That could result in a higher income tax bill and the total refund not being as high as the CSG refund claim made." I agree the difference might not be much but there could be a difference.

Of course, if they are really being picky, where applicable, they could also claim your ISF bill should have been higher (due to the CSG not paid and therefore your wealth being greater)...

I'm not sure whether it is possible, but if they are doing complete recalculations, is it possible a combination of exceptional circumstances could give rise to a case where someone on the low margin who had a one-off high CSG for some reason and who gets additional benefits due to low income is elevated to a slightly higher level and those benefits are withdrawn, etc.?

[pomme]

I've just had a letter to say the claim I submitted last week has now been split into three with a separate dossier numbers for 2012, 2013, and 2014 and they have been passed to the Service Contentieux at the Direction Departmentale des Finances.

[woolybanana]

Which is simply a way of slowing the whole process downnnnn.

[Hereford]

Just what we got as we posted earlier.

[pomme]

Yes, from our local tax office knowing about the issue and the forwarding of claims to the departmental offices, it seems possible there is some documentation floating around about what to do with the claims.

But it may be that is just to get to central offices where the claims can be collated so they can see the size of the problem. The legislation to action repayments has not yet be submitted for ratification, so there could be some work on trying to wriggle out going on.

[parsnips]

[quote user="pomme"]Yes, from our local tax office knowing about the issue and the forwarding of claims to the departmental offices, it seems possible there is some documentation floating around about what to do with the claims.

But it may be that is just to get to central offices where the claims can be collated so they can see the size of the problem. The legislation to action repayments has not yet be submitted for ratification, so there could be some work on trying to wriggle out going on.[/quote]

Hi,

   There certailly is "wriggling " going on ! ; see my post and links of 18/09/2015 at 16.41h.

[woolybanana]

Did we really expect otherwise?