Working out my Tax due

Alice_Carden

What would my tax payable be on £11,850 personal allowance?

Salary £11,800
Savings Interest £4,930 (outside ISA)
Share dividends £1,940 (outside ISA)

chrisbur

Alice_Carden wrote: »

What would my tax payable be on £11,850 personal allowance?

Salary £11,800
Savings Interest £4,930 (outside ISA)
Share dividends £1,940 (outside ISA)

Looks like none to me.
Salary is under your personal allowance, interest under your starting rate for savings interest and dividends under your tax-free dividend allowance.
https://www.gov.uk/apply-tax-free-interest-on-savings
https://www.which.co.uk/money/tax/income-tax/income-tax-on-savings-and-investments/dividend-tax-ax8p28u7hyqt

Alice_Carden

Would that change if my employer contributes £1,200 to my pension or are contributions excluded for income?

00ec25

no tax to pay

salary 11,800 - 11,850 personal allowance = zero taxable income = £0 tax to pay

starting rate for savings: salary 11,800 + other income (£0) = 11,800. This is less than your personal allowance therefore the whole of your stating rate for savings (£5,000) remains intact + you have not touched your £1,000 interest free allowance
so:
interest rec'd 4,930 - 5,000 - 1,000 = £0 = zero taxable interest

dividends rec'd £1,940 - dividends 0% band £2,000 = £0 = zero taxable dividends

At 18/19 tax rates, the tax thresholds are intended to help ("favour"?) low income people who have "high" unearned income, eg: pensioners. So, you can potentially receive £19,850 before you would pay any tax at all:

salary or pension no more than £11,850
savings interest no more than £6,000
dividends no more than £2,000
Total tax free income £19,850

00ec25

Alice_Carden wrote: »

Would that change if my employer contributes £1,200 to my pension or are contributions excluded for income?

contributions by an employer to your pension pot are not classed as your earnings

Alice_Carden

That's great to know and very helpful.

So now I know its not £1k or £5k savings tax free but I could qualify for £6k

00ec25

Alice_Carden wrote: »

So now I know its not £1k or £5k savings tax free but I could qualify for £6k

yes, provided your income is less than the personal allowance so you do not lose any of the starting rate . If your income is more than the personal allowance you lose it £1 for £1

you should post on the savings and investment board to offer advice on where to get such high interest rates .... ?

uknick

00ec25 wrote: »

you should post on the savings and investment board to offer advice on where to get such high interest rates .... ?

Maybe she has oodles of capital invested. Cleared £500k from house sale, not hard to get £5k in interest each year.