10% tax rate?

zaksmum

Would the 10% tax rate apply if a person is aged 55 with no savings, whose only income is £9300 p.a.from 30 hours weekly employment?

She does also get about £220 every 4 weeks for the disability element of WTC, and £220 every 4 weeks Higher rate Mobility DLA.

She's divorced and lives alone.

rageagainstessays

zaksmum wrote: »

Would the 10% tax rate apply if a person is aged 55 with no savings, whose only income is £9300 p.a.from 30 hours weekly employment?

She does also get about £220 every 4 weeks for the disability element of WTC, and £220 every 4 weeks Higher rate Mobility DLA.

She's divorced and lives alone.

I think the 10% rate is for people with no income apart from the income derived from their savings?

http://www.hmrc.gov.uk/taxon/worked-examples.htm

00ec25

the 10% rate applies only to interest from savings, it applies to the first £2,880 of interest but only in specific circumstances, in the context of your question the 10% rate is irrelevant

more relevant to you is the fact that:
a) the tax free personal allowance is £10,000; and
b) DLA and WTC are both non taxable anyway
http://www.hmrc.gov.uk/incometax/taxable-income.htm
http://www.hmrc.gov.uk/manuals/eimanual/eim76100.htm

so with a taxable income of only 9,300 pa you will not pay any income tax at all

how much national insurance you pay depends on how much you are paid each week since NI is paid weekly based on the amount actually earned each time

jem16

rageagainstessays wrote: »

I think the 10% rate is for people with no income apart from the income derived from their savings?

No it isn't. You could have up to £12,879 of earned income and still be eligible to pay 10% tax on £1 of savings interest.

However in the OP's case, no tax is due at all.

rageagainstessays

jem16 wrote: »

No it isn't. You could have up to £12,879 of earned income and still be eligible to pay 10% tax on £1 of savings interest.

However in the OP's case, no tax is due at all.

Thanks, didn't know that to be fair, didn't know the 10% tax rate existed till I googled.

molerat

How are share dividends dealt with ?

jem16

molerat wrote: »

How are share dividends dealt with ?

In what respect?

molerat

In respect of income, I assume the dividend received will be deducted from the savings limit.

Using your example above £12,879 of earned income and £1 share dividend leaves £0 for 10% savings rate ?

jem16

molerat wrote: »

In respect of income, I assume the dividend received will be deducted from the savings limit.

Using your example above £12,879 of earned income and £1 share dividend leaves £0 for 10% savings rate ?

I would expect that to be the case, yes.

Dividend income is seen as the top slice of income.

xylophone

http://www.hmrc.gov.uk/manuals/saimmanual/SAIM1110.htm

might be worth a look.

http://www.hmrc.gov.uk/taxon/worked-examples.htm Applies to the current tax year - next tax year see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf

molerat

Those are not much help really, dividends only mentioned with regard to higher rate tax and nothing mentioned in standard tax. I reckon they only owe me £3 so I won't bother, poking a stick in may make them look at their records from a few years back when they would not accept my calculations (twice) and sent me a cheque for £2K :cool: Next year will be easy, R85