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P800 problem?

Practical Issues
jdlemon
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P800 problem?

#152345

Postby jdlemon » July 14th, 2018, 5:37 pm

I've just received my first P800 and can't reconcile it completely, so was wondering whether I'd made an error or whether it was HMRC.

INCOME
Private pension A
State pension B
Dividend income C
Untaxed interest D
Total A+B+C+D

LESS DEDUCTIONS
Charitable E
Total E
Your income less total deductions A+B+C+D-E

LESS YOUR ALLOWANCES
Personal F
Total taxable income G=A+B+C+D-E-F

INCOME TAX RATES - INCOME INCOME TAX
Personal savings allowance D 0
Basic rate H1 x1
Higher rate H2 x2
Dividends @ 0% C 0
Total H=D+H1+H2+C x1+x2


Now I would have expected H to be the same as G, but it seems to be the same as G+E (may be a random coincidence).

Have I interpreted this incorrectly? If not, then how is a tax payer supposed to be able to check this ?

Puzzled of TW

PinkDalek
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Re: P800 problem?

#152357

Postby PinkDalek » July 14th, 2018, 7:05 pm

jdlemon wrote:I've just received my first P800 and can't reconcile it completely, so was wondering whether I'd made an error or whether it was HMRC. …

Total H=D+H1+H2+C x1+x2

Now I would have expected H to be the same as G, but it seems to be the same as G+E (may be a random coincidence).

Have I interpreted this incorrectly? ...


I don't receive P800s but the second table of yours makes sense to me. What they are doing is using the charitable donations to expand your basic rate band but, equally, the higher rate band is reduced. That is how you are getting higher rate relief for the additional 20% on the charitable donations. The first (basic rate) 20% having effectively been given at source.

The first table also appears to be correct and you have correctly worked out what appears to be the reconciling item between the two tables, which isn't a coincidence.

Hard to explain though!

I receive paper SA302 Tax Calculations. Last year's stated "Your basic rate limit has been increased by £X to £32,000 + £X for pension payments etc". It seems, from what you've said, this additional piece of information doesn't appear on the P800s but would have assisted.

Gersemi
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Re: P800 problem?

#152595

Postby Gersemi » July 16th, 2018, 8:30 am

The difference relates to E, Charitable Donations. These do reduce your taxable income so are correctly deducted from your taxable income figure. However as basic rate tax relief is given at source, HMRC only give higher rate relief, which they do by increasing the basic rate band and reducing the amount taxable at higher rates as described by PinkDalek. Hence they are included in income for the purposes of allocating rate bands.

It seems this isn't explained very well.


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