LTD Company Tax Calculator?

polymaff

Trouble is that the sacred cow has already been half-slaughtered by recent Income Tax "innovations" - particularly the PSA. Just what PSA you receive - and so how much income tax is paid on Taxable Savings Income is now a function of the dividend income.

The PSA is a shambles implementation; the MAT is a shambles implementation; the Dividend Allowance will be a shambles implementation - I expect.

And this is the Era of Tax Simplification !

Apodemus

Actually, thinking about this further...

Since the 0% dividend tax rate for the first £5k does not reduce your total taxable income, leaving me in the higher rate tax bracket, (even if I don't end up paying any tax at a higher rate...) Does that mean that I can get higher rate tax relief on my additional pension contributions?

Dazed_and_confused

You've answered your own question, if you don't actually PAY any tax at the higher rate then what extra could you possible get back?

Apodemus

Thanks, just one of the confusing aspects of this being a 0% tax element rather than a tax-free allowance and having HMRC saying that the income contributes to the total taxable income.

Pennywise

Also remember that you have complete freedom to allocate your personal allowance against whichever source of income you want. At recent courses, there have been some interesting examples given of very different end results from different allocations of the personal allowance, especially with the £5k dividend zero rate and the interest reliefs. The old way of thinking re allocations just doesn't work anymore under the new regime and people can easily lose out by paying too much tax if they don't understand these recent changes and plan accordingly. Tax has been made a lot harder with the changes announced in the past couple of years which are coming into effect this year and next.

polymaff

I wonder with what authority those courses were given? Advice - including from HMT and HMRC - on PSA and MAT has been overridden by the eventual implementations - and there are still some professional fundamentalists who don't accept that - for pragmatism's sake - they'll have to accept HMRC's implementation as being the methodology to conform to - even if it doesn't correctly implement the legislation.

When those methodologies are eventually frozen.

Pennywise

polymaff wrote: »

they'll have to accept HMRC's implementation as being the methodology to conform to - even if it doesn't correctly implement the legislation.

No they don't - the legislation always trumps HMRC's way of thinking. There are countless tribunal and court cases to prove it.

HMRC's methodology only applies where the legislation isn't clear. If the legislation IS clear, as it is with the optional allocation of personal allowance, HMRC have no power to argue any differently and will be defeated by the tribunals if they try.

polymaff

That selective quote reveals you colours - Pennywise.

"for pragmatism's sake - they'll have to accept HMRC's implementation"

..and so we have.

Pennywise

polymaff wrote: »

That selective quote reveals you colours - Pennywise.

"for pragmatism's sake - they'll have to accept HMRC's implementation"

..and so we have.

Not at all, pragmatic or not, none of my clients would appreciate me following incorrect HMRC guidance/examples which results in them paying more tax than they have to when there is the legal basis (ie following what the legislation says) for choosing a different calculation method which saves them tax.

Same as some people follow HMRC's guidance which says company directors must register for self assessment tax returns. I follow the law instead and don't register my clients until they are liable for SA returns under what the law says.

The tribunals/courts follow the law, and will often criticise HMRC for not following legislation.

https://ion.icaew.com/taxfaculty/f/tax-news---forum/2674/interest-and-dividend-tax-allowance

[Deleted User]

Current role and functions of the OTS

The OTS was established in 2010 to provide independent advice to the Government on simplifying the UK tax system and on reducing tax compliance burdens for businesses and individual taxpayers. Its core duties were to:

identify areas of complexity where the Government could simplify the tax system, and
undertake detailed reviews of particular areas of tax law to identify options for reform.

I wonder how they are progressing!