5 ms·

You employer doesn't know your deductibles in the Netherlands due to privacy concerns (and other rules as well), which you definitely want to file in most cases

by consp 5y ago

You employer doesn't know your deductibles in the Netherlands due to privacy concerns (and other rules as well), which you definitely want to file in most cases since you pay less money or get some back. You are also responsible for your taxes, if the employer screws up you should check it. This is probably different from the UK. It is not a "can't do" but more or less a "won't do". edit: so it's not that different, just a different method of doing so. Good to know.

wdb 5y ago
I wouldn't know what I would be able to get tax relief for as an employee. What kind of deductibles? Guess, I could claim that £6 per week for Covid work from home stuff. Wish you could claim the cost of repairing your bike, or public transport costs.
- maccard 5y ago
  Most of the big ones can be done without a self assessment. If you make a pension contribution for example, you can call hmrc and tell them and they'll adjust your tax code
  - RHSeeger 5y ago
    Doesn't that more or less equate to doing your taxes, just in little updates for each thing, rather than one big update at the end of the year?
    - maccard 5y ago
      Not at all. The list of things you can claim for is very limited, and the majority of them are automatically applied. Having to actually contact HMRC is a rarity. If you are salaried employee with no extra cash coming in, you don't need to do anything. Another example of how the system works - if you are working two jobs, both as a regular employee, HRMC will instruct your employer as to what your tax deduction should be for that paycheck to make sure that things are balanced. For <some large number>% of people, this will be correct, and if it's not, it will rectify itself over 2 or 3 pay periods. If that's _still_ not enough, a phone call to HMRC (usually taking less than 10 minuts for the two times in a decade I've had to do it) will resolve the issue in your next check.
- ridiculous_fish 5y ago
  Charitable contributions? How are those treated?
  - joshuaissac 5y ago
    Those are claimed by the recipient under a programme called Gift Aid.
    - ridiculous_fish 5y ago
      Do I understand correctly that charities report contributions to the government, which then adjusts the taxes due from the donors? That seems like a good system.
      - deleted 5y ago
        [deleted]
      - joshuaissac 5y ago
        The tax relief goes to the charity itself, rather than the donor. They can claim a top-up of up to 25% of your donation from the government, as long as the total amount claimed by all donation recipients does not exceed the total annual income tax paid by the donor. So if you donate £100 and fill out a declaration saying that you 'Gift Aid' that donation, the charity can claim an additional £25 from the government, as long as you paid at least £25 in income taxes that financial year.
        oarsinsync 5y ago
        Note that if you're paying in the 40% and/or 45% income tax brackets, the charity doesn't know about that, and still only gets the 25% topup (equivalent to the 20% income tax most people pay). You can either: * Gift that remaining amount to HMRC by doing nothing (it will not go to the charity) * Claim it back (I don't know any other way to do this other than filing a self assessment)
        5y ago
- ZeroGravitas 5y ago
  You can claim those, if you use the transport as part of your work but notably not for travelling to and from work, 20p per mile for the bike.
maccard 5y ago
Your employer doesn't need to know what your deductibles are (also the deductibles are much more limited here). If you, for example, make a large one off pension contribution, HMRC will adjust your tax code, which your employer will just apply to your payroll.
philjohn 5y ago
We can deduct far less than you can in the Netherlands - mortgage interest for example is deductible for you, but not in the UK. Someone on PAYE will have most of the deductibles handled by their employer (pension, any salary sacrifice schemes etc).
- teh_klev 5y ago
  In the UK, deductibles on mortgage interest payments (known as MIRAS[0]) was abolished for private home owners in 2000. As a renter this kind of always stuck in my craw that homeowners got this preferential treatment and was quite glad it was abolished (even after becoming a "homeowner"). Oddly, buy-to-let landlords do retain this deductible, though HMRC have fiddled around with how this works over recent times[1]. [0]: https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_so... [1]: https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords https://www.gov.uk/government/publications/restricting-finan...
  - philjohn 5y ago
    Yes, the BTL sort of makes sense though if you view the mortgage as a business expense, but BTL has had a distorting effect on the UK housing market for too long - changes are desperately needed here, but with so many Tory donors being housing firms, it's unlikely to happen.
pmyteh 5y ago
You tell the tax office of any unusual deductibles, and they give your employers a 'tax code' which tells them how much allowance to give you (but critically not why, to better protect your privacy). Even this isn't needed in most cases; things are either done employer side (paid from pre-tax income, like pensions) or directly by the government (basic rate tax is semi-automatically added to charitable donations, so only higher rate taxpayers need to declare it, and they all fill in a short return anyway).

by consp 5y ago

wdb 5y ago

I wouldn't know what I would be able to get tax relief for as an employee. What kind of deductibles? Guess, I could claim that £6 per week for Covid work from home stuff. Wish you could claim the cost of repairing your bike, or public transport costs.

maccard 5y ago
Most of the big ones can be done without a self assessment. If you make a pension contribution for example, you can call hmrc and tell them and they'll adjust your tax code
- RHSeeger 5y ago
  Doesn't that more or less equate to doing your taxes, just in little updates for each thing, rather than one big update at the end of the year?
  - maccard 5y ago
    Not at all. The list of things you can claim for is very limited, and the majority of them are automatically applied. Having to actually contact HMRC is a rarity. If you are salaried employee with no extra cash coming in, you don't need to do anything. Another example of how the system works - if you are working two jobs, both as a regular employee, HRMC will instruct your employer as to what your tax deduction should be for that paycheck to make sure that things are balanced. For <some large number>% of people, this will be correct, and if it's not, it will rectify itself over 2 or 3 pay periods. If that's _still_ not enough, a phone call to HMRC (usually taking less than 10 minuts for the two times in a decade I've had to do it) will resolve the issue in your next check.
ridiculous_fish 5y ago
Charitable contributions? How are those treated?
- joshuaissac 5y ago
  Those are claimed by the recipient under a programme called Gift Aid.
  - ridiculous_fish 5y ago
    Do I understand correctly that charities report contributions to the government, which then adjusts the taxes due from the donors? That seems like a good system.
    - deleted 5y ago
      [deleted]
    - joshuaissac 5y ago
      The tax relief goes to the charity itself, rather than the donor. They can claim a top-up of up to 25% of your donation from the government, as long as the total amount claimed by all donation recipients does not exceed the total annual income tax paid by the donor. So if you donate £100 and fill out a declaration saying that you 'Gift Aid' that donation, the charity can claim an additional £25 from the government, as long as you paid at least £25 in income taxes that financial year.
      - oarsinsync 5y ago
        Note that if you're paying in the 40% and/or 45% income tax brackets, the charity doesn't know about that, and still only gets the 25% topup (equivalent to the 20% income tax most people pay). You can either: * Gift that remaining amount to HMRC by doing nothing (it will not go to the charity) * Claim it back (I don't know any other way to do this other than filing a self assessment)
        5y ago
ZeroGravitas 5y ago
You can claim those, if you use the transport as part of your work but notably not for travelling to and from work, 20p per mile for the bike.

maccard 5y ago

Your employer doesn't need to know what your deductibles are (also the deductibles are much more limited here). If you, for example, make a large one off pension contribution, HMRC will adjust your tax code, which your employer will just apply to your payroll.

philjohn 5y ago

We can deduct far less than you can in the Netherlands - mortgage interest for example is deductible for you, but not in the UK. Someone on PAYE will have most of the deductibles handled by their employer (pension, any salary sacrifice schemes etc).

teh_klev 5y ago
In the UK, deductibles on mortgage interest payments (known as MIRAS[0]) was abolished for private home owners in 2000. As a renter this kind of always stuck in my craw that homeowners got this preferential treatment and was quite glad it was abolished (even after becoming a "homeowner"). Oddly, buy-to-let landlords do retain this deductible, though HMRC have fiddled around with how this works over recent times[1]. [0]: https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_so... [1]: https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords https://www.gov.uk/government/publications/restricting-finan...
- philjohn 5y ago
  Yes, the BTL sort of makes sense though if you view the mortgage as a business expense, but BTL has had a distorting effect on the UK housing market for too long - changes are desperately needed here, but with so many Tory donors being housing firms, it's unlikely to happen.

pmyteh 5y ago

You tell the tax office of any unusual deductibles, and they give your employers a 'tax code' which tells them how much allowance to give you (but critically not why, to better protect your privacy). Even this isn't needed in most cases; things are either done employer side (paid from pre-tax income, like pensions) or directly by the government (basic rate tax is semi-automatically added to charitable donations, so only higher rate taxpayers need to declare it, and they all fill in a short return anyway).