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I'm trying to figure out why my P60 doesn't account for the…

I'm trying to figure...

I'm trying to figure out why my P60 doesn't account for the taxes paid when my RSU vest. It seems that they put the full amount of shares vested but they don't surface the almost 54% taxes already paid on them

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Customer reply replied 7 months ago
I have shares vesting every 6 months. Whenever a batch vests (say 20), half of them +1 get sold to cover taxes. So only 9 in this example get transferred to my account.
When I get my P60, the full value of the 20 shares is reflected there, but not the taxes I have already paid, so when I do the tax return it seems as if I owe money to HMRC.
Answered in 10 hours by:
1/13/2018
bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 5,310
Experience: FCCA FCMA CGMA ACIS
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Hello, I am pleased to be able to help you with your question.

Did you make an election rergarding your RSUs?

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Customer reply replied 7 months ago
The RSU we are given are processed at the time of vesting, so they automatically end up in a Morgan Stanley account then. When this happens, Morgan Stanley processes the taxes through “sell to cover” which sells enough shares to cover the amount I have to pay. In FY 2016/2017 this amount was 50.28%, so half of the shares are sold + 1. However, as the additional share is not entirely used to pay taxes (only .28%), a new payslip is generated that is used to transfers the change. Attached an example of what that payslip looks like. I have no control over this process, the grant schedule and vesting can’t be changed and taxes are automatically paid. Once the shares are vested they stay in my account. I haven’t sold any share in FY 2016/2017

By this process, you would appear to have effectively a second employer which explains the absence of data on the P60. You will have to submit two SA102s, one for your employer and one for Morgan Stanley. The tax position will all then come out in the wash as it were and, unless you have been pushed into higher rate tax, there should be no difficulty.

I do hope that you have found my reply of assistance.

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Customer reply replied 7 months ago
Sorry, I’m not familiar with that. I’m at the stage of doing my tax return, does that mean I have to report these taxes somewhere else in the form? How do I make sure the balance of taxes owed goes to 0?

By completing two SA102s, you will be declaring all income and tax deducted. It is that simple, just unwieldy.

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Customer reply replied 7 months ago
Would you be able to elaborate on that a bit with regards ***** ***** tax return?
Where would the additional Morgan Stanley data go?Thanks

On the second SA102.

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Customer reply replied 7 months ago
I’m doing this online and I have never submitted an SA102 form so I would appreciate some guidance on finding the right section to record this. Do I need to say that I had more than one employer? What do I enter as their PAYE code though?

You do. This data should be on the pay slips sent to you, if it is not then you will have to request the data from the payer. Alternatively, you could declare the Morgan Stanley income as 'Other income taxed at source.

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Customer reply replied 7 months ago
I just called HMRC and they are advising against this as the taxes coming from RSU would not even out the owed taxes from my P60. Is there anything else you'd recommend doing?

That is always possible if your income has pushed you into a higher tax bracket. HMRC advice is typical from ill trained oprtatives operating from a very limited set of stock answers. What are you supposed to do, just not declare the income at all? HMRC will be all over you for tax evasion if you do not.

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Customer reply replied 7 months ago
They asked me to review the data with an accountant. Due to the way the RSU are declared, the P60 shows as if I received 9K of extra tax allowance but in reality, it's the lack of the taxes already paid causing that. Morgan Stanley is technically not an additional employer as I'm not receiving money from them, so I shouldn't fill out an additional SA102 form. The incoming money is in my P60, they are only figuring out how much taxes I'm paying and selling shares to cover that. So if I was to declare an additional employer, Morgan Stanley will figure as giving me no money but charging me taxes.

In that case add the MS taxes to the P60 figure.

bigduckontax
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Category: UK Tax
Satisfied Customers: 5,310
Experience: FCCA FCMA CGMA ACIS
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