A taxing calculation

27th June 2017

Calculate your own tax…

The introduction of the so-called dividend and savings allowances from April 2016 was intended to reduce the tax liability for taxpayers with modest dividend and interest income, possibly removing them from the need to prepare a tax return altogether.

For other taxpayers however, the interaction of these changes, together with the 0% starting rate band for savings and the personal allowance, makes the correct calculation of your income tax liability far from straightforward in some cases.

HMRC have updated the tax calculation summary notes for 2016/17 (available here), which offer taxpayers a method to calculate their own tax when preparing their tax return.

…but beware of problems.

Related to these tax changes, HMRC were unable to correctly set their computational standards before the start of the tax return season. This means that for taxpayers with certain combinations of income, third party software and HMRC’s own free software may not calculate the correct amount of tax due.

For those using third party software in these cases, it will be necessary to submit the return by post, rather than electronically. This will add further to HMRC’s already bulging mailbag, and result in further delays. For those using HMRC’s own software, it is hoped that HMRC will somehow be able to later correct these calculations.

The cases are included in HMRC’s list of exclusions for 2016/17 (available here), the most common cases being numbers 51, 52 and 56.



 
Other items in Blogs
 
Lisa Smith
29th September 2020 Extension to deferment of VAT due

On 24 September 2020 the Chancellor announced and extension to scheme allowing for the deferment of VAT for businesses affected by Corona Virus.  Businesses that took advantage of the arrangements to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021, will have the option to pay the outstanding amounts…

Read More »

Chris Kelly
25th September 2020 COVID-19 Business Support – Winter Economy Plan

  With the Autumn Budget cancelled the Chancellor has announced a Winter Economy Plan introducing a package of measures to support businesses.   The highlights are:   The Coronavirus Jobs Retention Scheme (CJRS) – Will end as planned on 31 October 2020.   A new Job Support Scheme – To support viable UK employers who…

Read More »

Steven Denton
25th September 2020 HMRC Job Support Scheme (JSS)

On 24th September the government announced the launching in November of the Job Support Scheme to replace the existing Furlough Scheme that is feted to end on 31st October. The JSS is to run from 1st November through to 30th April, but initial rules may be amended after three months.   To qualify for the…

Read More »

Matilda Mawson
25th September 2020 2019/20 Pension Savings Statement – Request yours today!

  If you have made contributions to a registered pension scheme of more than £40,000 in the tax year, your scheme administrator should automatically send you a pension savings statement by 6 October 2020. This will detail your total pension input for the 2019/20 tax year as well as your pension input for the 3…

Read More »

Ian Piper
24th September 2020 Corporation Tax due soon: Not necessarily.

Companies with 31 December 2019 year ends will be due to pay their corporation tax on 1 October 2020. If that company is expecting to suffer a loss during the 2020 financial year, perhaps due to COVID-19 related reasons, it should be possible to carry that loss back one year and claim a refund of…

Read More »

Ruth Pearson
17th September 2020 Fuel Rates From September 2020

HMRC have updated the latest company car advisory fuel rates. These rates apply from 1 September 2020.   The guidance states that you can use either the previous or current rates, for up to one month from the date the new rules apply.   The new rates per mile are below: Engine size Petrol LPG…

Read More »