A simple, visual model of 2016/17

EnglishMohican

From the HMRC Website, talking about Personal Allowance:-

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

So Marriage Allowance INCREASES one's Personal Allowance. It is not a credit or tax deduction. So £11000 can become £12100 even if HMRC show the derivation of the total Personal Allowance by including the basic and the adder figures on the calculation sheet.

Eco_Miser wrote: »

It sneaks in here:

Yes, I concede. Not being in the higher echelons of tax payers, I missed that. However, the tool would be clearer if it said specifically that having calculated your total savings interest for the year, you could subtract £1000 before including any positive remainder in polymaff's tool.

And I still believe that the £16000 figure can become £17100 under some circumstances (that being £11000 plus £1100 plus £5000.)

But I await correction - preferably with some evidence.

etienneg

polymaff wrote: »

The old idea that computing liability as the sum of three stand-alone calculations was starting to ail a few years ago. Now it is dead.

Could you provide a link or reference to HMRC's equation method, please?

Eco_Miser

EnglishMohican wrote: »

Yes, I concede. Not being in the higher echelons of tax payers, I missed that. However, the tool would be clearer if it said specifically that having calculated your total savings interest for the year, you could subtract £1000 before including any positive remainder in polymaff's tool.

But you can't do that - the PSA may be zero or £500 or £1000 depending on total income, and in certain cases, one can be a higher rate taxpayer, therefore only having a £500 PSA, without actually paying any higher rate tax. In other cases, with savings income over £500 but under £1000, one can pay higher rate tax only on part of one's savings income, which would not have been payable if one could deduct the first £1000 savings income before determining if one were a higher rate taxpayer.

polymaff

EnglishMohican wrote: »

From the HMRC Website, talking about Personal Allowance:-

"Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person's Allowance. It’s smaller if your income is over £100,000. "

If so, then the HMRC Website is wrong

EnglishMohican wrote: »

...And I still believe that the £16000 figure can become £17100 under some circumstances (that being £11000 plus £1100 plus £5000.)

Only if you cling to your mistaken belief that the MAT is added to the personal allowance

EnglishMohican wrote: »

...But I await correction - preferably with some evidence.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/516175/2016-indi-taxnic-calc.zip

polymaff

EnglishMohican wrote: »

...Not being in the higher echelons of tax payers, I missed that. However, the tool would be clearer if it said specifically that having calculated your total savings interest for the year, you could subtract £1000 before including any positive remainder in polymaff's tool.

Not clearer - just wrong.

EnglishMohican

polymaff wrote: »

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/516175/2016-indi-taxnic-calc.zip

This relates to 2015/6 and includes details of how to gross up dividends and savings - neither of which is relevant any more. Do you have any evidence relating to the 2016/7 tax year - which is what this thread is about.

Pincher

I do a spreadsheet before filling in the HMRC on-line Self-Assessment thing, and it's usually matching pretty well.
For 2016/17, I thought it's X+£2k, to pay, including the damned capital gains, but the HMRC online system says it's X.

Note that if you underpay by 31st January 2017, you can be fined,
so I deliberately overpaid. Whether automatically or not, they refunded the difference, based on X.

If they are not going to say anything, I'm not going to try to clear it up either. Confusion is bliss when you are £2k up on the deal.

polymaff

EnglishMohican wrote: »

This relates to 2015/6 and includes details of how to gross up dividends and savings - neither of which is relevant any more. Do you have any evidence relating to the 2016/7 tax year - which is what this thread is about.

My mistake:

https://www.gov.uk/government/publications/self-assessment-technical-specifications-2017-individual-returns

Stage 4 is the relevant section, and subsections 4.6.4 to 4.6.9 inclusive the relevant subsections. It might be simplest if you note that nothing can increase the Personal Allowance.

polymaff

etienneg wrote: »

Could you provide a link or reference to HMRC's equation method, please?

My mistake:

https://www.gov.uk/government/publications/self-assessment-technical-specifications-2017-individual-returns

polymaff

Pincher wrote: »

I do a spreadsheet before filling in the HMRC on-line Self-Assessment thing, and it's usually matching pretty well.
For 2016/17, I thought it's X+£2k, to pay, including the damned capital gains, but the HMRC online system says it's X.

Note that if you underpay by 31st January 2017, you can be fined,
so I deliberately overpaid. Whether automatically or not, they refunded the difference, based on X.

If they are not going to say anything, I'm not going to try to clear it up either. Confusion is bliss when you are £2k up on the deal.

I can't remember the HMRC online system ever being perfect. Usually the errors are in areas which don't affect too many people, but this year they've left in a big one involving the correct interaction of the Starting Rate Allowance and the Personal Savings Allowance. Their announced "workaround" is that you abandon online filing and make a paper return.

Suppose that I'd written the above on April 1st. (Echo: You did!)