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Any Answers Answered: Reporting underpaid tax


TAXtv's Giles Mooney and Tim Good are back to tackle two questions from the pages of Any Answers on A and B shares and the four year limit when dealing with tax returns.  

7th Mar 2023
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To view the full questions and AccountingWEB reader answers click on the links below.

A and B Shares

AccountingWEB member CWservices6064 asked: "A company was set up several years ago with A & B shares issued on incorporation (A to father & B to son) with the following prescribed particulars:

  • Voting rights: one vote per share;
  • Dividend rights: entitled to such dividends as the directors determine;
  • Rights to participate in capital: full rights to return of capital and to any surplus; whether redeemable: not redeemable

Dividends have historically been paid equally on both the A & B shares. The father is now winding down his involvement so would like to reduce his dividend or sometimes not take one at all.

I believe that this is fine unless it comes to a point where distributable reserves would not have been sufficient to cover dividends if they were paid equally on all shares. Is this relevant if the company was formed with the rights for each share set out above?"

Reporting underpaid tax to HMRC

Our second question came from Any Answers regular snickersinatwix who asked: "Our client works for the NHS with a final salary pension scheme. This year, the pensions department wrote to her and told her that pension input amounts had exceeded £40k and she may have excess contributions.  This is the first time they have written to her regarding this. 

We now have the PIA details for the last lots of years and if you add together the two schemes and work through carry back etc, she overcontributed not only in 2021/22 but also from 2017/18 - 2019/20.

So we need to do an overpayment relief claim for 2018/19 - 2019/20 to sort those. I would welcome anyone's thoughts on 2017/18 which is out of time for an overpayment relief claim."

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Replies (3)

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By Catherine Newman
08th Mar 2023 07:46

Exceeding the £40K leads to a liability and not a refund. It seems to have suddenly come to the fore for a lot of people. I have had it to happen to a GCHQ person and a doctor.

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By Roy Price
09th Mar 2023 10:26

Well done Gyles and Tim excellent coverage. Of course higher earners also face having the £40k reduced perhaps as low as £10k something else to check.

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By Paul Crowley
21st Mar 2023 22:29

Much appreciated

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