Tax Calculation Questions
Posted: February 9th, 2019, 1:45 pm
Hello
I'm trying to check the calculation for a 2017-18 tax return that I (perhaps foolishly) have already submitted using the HMRC's online system. I am a just an enthusiastic, inquisitive amateur, so please accept my apologies if the answers to these questions are obvious to you.
I am looking at the HMRC's SA110 Notes 2018 document. References are to this.
Q1: This question relates to Section 9 (Calc tax after Gift Aid...). Assume a net income of £45k [box 115], gift aid of £1k. and a net income of £33k [box A164]. This gives an income tax due after allowances of £1.8k [box 267]. So, into Section 9, box 268 = box 267 = £1.8k. Box A269 = box A115 = £45k. Multiply this by 0.2 to get £9k for box A270. All other inputs are zero (ie. no Child Benefits, CGT, Lloyds, etc. My issue is that the Income Tax due [box A297, which is then used further down in box A328] comes to the £9k figure (ie. does not reflect the allowances or tax rates). What am I doing wrong?
Q2: I have read several posts about the following issue on this site. I have (small amounts of) (1) salary, (2) savings (incl. foreign income) and (3) dividends and so I need to determine which way to apply the personal allowance against these to give the lowest income tax bill. Section 22 appears to be designed to do this for me. Do I assume that it does not work and I need to use trial and error or another method?
Assuming there is something to be gained by working through Section 22.... (having gone through it I can't imagine many people would do it, much less understand it)
Q3: The instruction for box L2a are "BR band (£33,500) + A119". But the box is pre-filled with £33,500. Should the figure in the box include A119 or not?
Q4: What are the instructions for boxes L41, L42 and L43 (or where does the information for these boxes come from)?
Q5: The instruction for box L56e1 gives two options, one of which is "L56e1 = lower of (L35 minus L56e)". This doesn't make sense. Does anyone know what this should be?
Q6: The instruction for box L56f state that if [something] and "(L3 + L11) minus (L49 + L51 > Q8". Two questions arise: (i) should there be a closing ")" after L51? and (ii) what is intended by the reference to "Q8"?
Q7: If box L48 gives a negative number (it staggers me that HMRC elsewhere refers to 'a minus figure'), should it be substituted with 0?
Q8: Finally, it seems likely that I will want to adjust the tax return. If the HMRC software does not calculate the tax in the most advantageous way, and given that it is too late to submit a paper return, does anyone have advice as to what to do - ie. to advise which order/way to apply the personal allowance?
Thanks for your attention. Grateful for any assistance.
I'm trying to check the calculation for a 2017-18 tax return that I (perhaps foolishly) have already submitted using the HMRC's online system. I am a just an enthusiastic, inquisitive amateur, so please accept my apologies if the answers to these questions are obvious to you.
I am looking at the HMRC's SA110 Notes 2018 document. References are to this.
Q1: This question relates to Section 9 (Calc tax after Gift Aid...). Assume a net income of £45k [box 115], gift aid of £1k. and a net income of £33k [box A164]. This gives an income tax due after allowances of £1.8k [box 267]. So, into Section 9, box 268 = box 267 = £1.8k. Box A269 = box A115 = £45k. Multiply this by 0.2 to get £9k for box A270. All other inputs are zero (ie. no Child Benefits, CGT, Lloyds, etc. My issue is that the Income Tax due [box A297, which is then used further down in box A328] comes to the £9k figure (ie. does not reflect the allowances or tax rates). What am I doing wrong?
Q2: I have read several posts about the following issue on this site. I have (small amounts of) (1) salary, (2) savings (incl. foreign income) and (3) dividends and so I need to determine which way to apply the personal allowance against these to give the lowest income tax bill. Section 22 appears to be designed to do this for me. Do I assume that it does not work and I need to use trial and error or another method?
Assuming there is something to be gained by working through Section 22.... (having gone through it I can't imagine many people would do it, much less understand it)
Q3: The instruction for box L2a are "BR band (£33,500) + A119". But the box is pre-filled with £33,500. Should the figure in the box include A119 or not?
Q4: What are the instructions for boxes L41, L42 and L43 (or where does the information for these boxes come from)?
Q5: The instruction for box L56e1 gives two options, one of which is "L56e1 = lower of (L35 minus L56e)". This doesn't make sense. Does anyone know what this should be?
Q6: The instruction for box L56f state that if [something] and "(L3 + L11) minus (L49 + L51 > Q8". Two questions arise: (i) should there be a closing ")" after L51? and (ii) what is intended by the reference to "Q8"?
Q7: If box L48 gives a negative number (it staggers me that HMRC elsewhere refers to 'a minus figure'), should it be substituted with 0?
Q8: Finally, it seems likely that I will want to adjust the tax return. If the HMRC software does not calculate the tax in the most advantageous way, and given that it is too late to submit a paper return, does anyone have advice as to what to do - ie. to advise which order/way to apply the personal allowance?
Thanks for your attention. Grateful for any assistance.