Is accountant wrong?

[LindaV]

I am an OAP and was surprised to see my online accountant thinks I owe £420 in tax. Then I noticed he had not deducted the £289 I had donated to charity this last year. I asked him to do so and he said baffling things like - You're not a higher rate tax payer so I can't. I thought the £289 could be deducted as an expense - is this not so? Thanks

No, charitable donations only make a difference if you're a higher rate taxpayer, not basic rate.

Charity donations only extend the amount of tax you pay at basic rate vs higher rate. So if you are not a higher rate tax payer, your charity donation makes no difference.

It extends the basic rate band. What he should be able to do is tell you WHY you owe £420.

He’s right.

The charity gets the tax relief not you as a basic rate tax payer.

Most pensioners don't need an accountant, so your tax affairs must be little more complex than your OP indicates. What are your sources of income which could result in an extra tax bill?

Why do you think Mumsnet strangers know more than your accountant?

@hewash20state pension has no tax deducted but is taxable income. If you have other pensions it is possible you will have a tax bill each year on your state pension, if this has not been coded out from a private pension.

Do you want to post all of your incomings and outgoings and we’ll recalculate your personal tax on the forum?

In answer to HewasH29 and Ladybugheart - I have let out my home while visiting my grandchildren abroad so the rent has been added to my state pension.
And the accountant is operating online but from a different country from the UK so I thought he might have made a mistake. He did make a mistake last year.

If you have a mistake making, not based in the UK, online accountant I would highly advise switching to a local one that you can pop in and actually talk to in person

Unforch. accountants over here cost a fortune cf my modest income. Also I didn't realise until this time round that he was not based in the UK. But thanks very much for confirming what he's said, albeit in much simpler terms

Because some of us are Chartered Accountants with over 30 years experience in practice!

However, a simple tax code issue doesn't require an accountant. It's DIY over the phone to HMRC. Which is why I assumed the OP could have overseas income, investments, rental properties etc.

Your mistake is to not use a professional UK based Chartered Accountant. You get what you pay for. In your case an unexpected tax bill and worry.

Did you gift aid the charity donation?

I would tend to agree with this! Or do it yourself, it isn’t particularly hard.

When you rented out your home was it a formal agreement or just a friend. You might have been able to claim the rent a room allowance which gives you £7500 before you pay tax on the rent.

It was a formal agreement through a letting agent

Yes Gift aided. Should I not do so? Am I making myself liable for something?

Get a UK accountant. Why have you continued to use this one? He isn’t wrong about the charity thing this time round but if had made a mistake last time, then why would you use him again?

Would I still be able to claim under the rent a room scheme please?

No, that's not for for rental of a whole property - it's for a lodger.

If you have a pension plus a rental property, then it's inevitable really that you will need to pay some tax, unless you are making a loss on the rental. That's really a very small amount to pay for a year's tax on 2 sources of income, so your accountant has probably done a good job for you. They are right about the charitable donations.

Or so you say. Anyone can make anything up on the internet.

I’ve just checked the government website and as long as you’re not living abroad you might still be able to claim the tax relief. It has to be let furnished and be your main home.

It's not her home at all. She doesn't live there at the moment. It's legally rented out to someone else.
Rent a room is for when you rent out a room in the house you live in. You have to be a 'resident landlord', meaning you live in the same property. It's for lodgers. It's all very clear on .gov if the name of the scheme isn't obvious enough.