Years ago we used to get MIRAS (I think it was mortgage interest relief at source).Basically it was tax relief on your mortgage interest payments.I had a preferential mortgage as I worked for the Pru,but when i left it reverted to the standard variable.Somewhere along the line the MIRAS got lost and i didn`t notice.Some years later it was noticed and i claimed it back from the Inland Revenue.They and the halifax argued the toss about who owed me what.I ended up with just over £4000.So i complained to both of them about their the hardship I`d been through without what should have been my money.They both paid me ex gratia payments to shut me up.I complained again and they sent me more money on the proviso that i signed a form to say that was the end of it,which i did.
So i ended up with about £5000.
Majorca was lovely that year.
I went out and bought a 3 piece from UNO.I paid for it on my visa card.They went bust.I never received the 3 piece or a penny back from the administrators.
In one hand ,out the other.
Another one was when i claimed my tax back as a Pru agent and they asked if i had another job,which i admitted to,as i collected the Pools aswell.They told me they owed me £400,but i owed them £200,so i said just deduct the £200 i owe you from the £400 you owe me.
Some plonker at the Inland Revenue hit the + button instead,so i got £600 back.
I asked the accountant what i should do.
He said,"Spend it",so i did and never heard another word about it.
Its quite simple really mate. All the money you have coming in is classed as income. You have a personal allowance for last year which was £7475 which is the amount of income you can have before you pay tax. Any amount over that is then taxable, so for example if you had an income last year of say £14000. Just take 7475 from 14000 which leaves 6525. That is then the amount that you pay tax on at 20%, so 20% of 6525 comes out at £1205, and that is the amount of tax you should have paid. If you are a standard tax payer doing a normal job, your company will know what your allowance is and will have a table to work it out each week or month so that you dont pay it all in one go. At the end of the tax year you will get a P60 which shows how much you earned and how much tax you paid. The chances of you paying too much tax if you are just doing a standard job are slim, it only gets complicated if like me, I have 4 small pensions, they tax me on 2 of them each month, but because my total at the end of the year is so low I usually have to claim back what they took off me.