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    • Richard 1963
    • By Richard 1963 19th Apr 17, 2:37 PM
    • 7Posts
    • 2Thanks
    Richard 1963
    Use of Tax Allowances
    • #1
    • 19th Apr 17, 2:37 PM
    Use of Tax Allowances 19th Apr 17 at 2:37 PM
    In 2016/17 there are different tax allowances for employment, savings and dividends. HMRC apply allowances in this order. However, I've read that you are allowed to use allowances in any order that reduces your tax bill.

    HMRC website and a software package I've used calculate a tax bill higher than I believe it would be if (in my case) the allowance for dividends was used first.

    Can anyone confirm that you can use allowances in any order and also does anyone know of a software package that advises the optimal use of allowances?
Page 1
    • zx81
    • By zx81 19th Apr 17, 2:40 PM
    • 12,475 Posts
    • 12,639 Thanks
    zx81
    • #2
    • 19th Apr 17, 2:40 PM
    • #2
    • 19th Apr 17, 2:40 PM
    You'll get a better answer on the Tax boards.
    • adindas
    • By adindas 19th Apr 17, 2:44 PM
    • 3,170 Posts
    • 1,520 Thanks
    adindas
    • #3
    • 19th Apr 17, 2:44 PM
    • #3
    • 19th Apr 17, 2:44 PM

    software package I've used calculate a tax bill higher than I believe it would be if (in my case) the allowance for dividends was used first.
    ?
    Originally posted by Richard 1963

    Would you please share which software are you using,
    How much does it cost and where to buy it ??

    Thanks
    Last edited by adindas; 19-04-2017 at 2:47 PM.
    • Richard 1963
    • By Richard 1963 19th Apr 17, 3:04 PM
    • 7 Posts
    • 2 Thanks
    Richard 1963
    • #4
    • 19th Apr 17, 3:04 PM
    Use of Tax Allowances
    • #4
    • 19th Apr 17, 3:04 PM
    The package I used is Andica

    They offer a range of packages for Self Assessment and other tax things. Costs £15 - 20 depending on how many users you want and whether you download it or get disks.

    You buy it from their website - google andica and you will find it
    Last edited by Richard 1963; 19-04-2017 at 3:05 PM. Reason: Extra information
    • eskbanker
    • By eskbanker 19th Apr 17, 3:07 PM
    • 5,005 Posts
    • 4,755 Thanks
    eskbanker
    • #5
    • 19th Apr 17, 3:07 PM
    • #5
    • 19th Apr 17, 3:07 PM
    In 2016/17 there are different tax allowances for employment, savings and dividends. HMRC apply allowances in this order. However, I've read that you are allowed to use allowances in any order that reduces your tax bill.

    HMRC website and a software package I've used calculate a tax bill higher than I believe it would be if (in my case) the allowance for dividends was used first.

    Can anyone confirm that you can use allowances in any order and also does anyone know of a software package that advises the optimal use of allowances?
    Originally posted by Richard 1963
    I'm no expert but articles such as http://www.pruadviser.co.uk/content/knowledge/oracle_archive/oracle-technical/oracle-tech-january16/taxation/ don't suggest any discretion in the order of taxation, although in a quick search I couldn't see any HMRC documents that referred to this.

    I'm sure I've read posts elsewhere on here clarifying that neither the savings nor the dividend allowances are allowances in the strict sense, but are instead a mechanism via which qualifying amounts are taxed at 0% rather than not taxed at all, so I'm not convinced that these are as interchangeable as you seem to think.

    Where did you read about reordering allowances?

    Edit: this is all discussed in detail in this thread on the savings board
    Last edited by eskbanker; 19-04-2017 at 3:16 PM. Reason: Added thread reference
    • Richard 1963
    • By Richard 1963 19th Apr 17, 3:15 PM
    • 7 Posts
    • 2 Thanks
    Richard 1963
    • #6
    • 19th Apr 17, 3:15 PM
    Use of Tax Allowances
    • #6
    • 19th Apr 17, 3:15 PM
    There was an article in the Telegraph (I think it was Saturday 15th) that stated that you could do this.

    I also googled "Personal Tax Allowances 2016/17" and found a link called "Interest and Dividend Tax Allowance". This thread gives examples of how to save money.

    I've seen the Prudadviser post and couldn't find anything on the HMRC site so not sure how to establish what you can and can't do. I've heard of Martin Lewis so thought I would try it and see if anyone could help clarify the situation
    Last edited by Richard 1963; 19-04-2017 at 3:18 PM.
    • Richard 1963
    • By Richard 1963 19th Apr 17, 3:19 PM
    • 7 Posts
    • 2 Thanks
    Richard 1963
    • #7
    • 19th Apr 17, 3:19 PM
    Use of Tax Allowances
    • #7
    • 19th Apr 17, 3:19 PM
    Thanks. I'm new to the site - do you know how I can post under Tax?
    • zx81
    • By zx81 19th Apr 17, 3:31 PM
    • 12,475 Posts
    • 12,639 Thanks
    zx81
    • #8
    • 19th Apr 17, 3:31 PM
    • #8
    • 19th Apr 17, 3:31 PM
    Go to the Tax boards - http://forums.moneysavingexpert.com/forumdisplay.php?f=22

    and create a thread exactly as you did here.
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