Self assessment help!

droiderm

Thanks again.

You are right, I misunderstood dividend tax.
3534.99 came from a salary calculator online using a gross annual salary of 32,101 and a 6 percent pension contribution.

Perhaps I should wait for my p60 and pay an accountant:)

droiderm

Dazed_and_confused wrote: »

Well each £1 your taxable income reduces then that is £1 less to be taxed at the dividend higher rate of 32.5%.

So personally I would say yes, it will make a big difference.

I'm not sure what the purpose of your thread is if you aren't bothered about the figures being as accurate as reasonably possible

Yes I am bothered. I just wanted to get a feel for how much I need to keep by. Like I said in my previous post, I need to wait for my p60 and get an accountant

Dazed_and_confused

You are right, I misunderstood dividend tax.
3534.99 came from a salary calculator online using a gross annual salary of 32,101 and a 6 percent pension contribution.

I'm at a bit of a loss as to how you can pay 6% on the original £3,520?

If your current job has a net pay pension scheme then your "salary" of £28,581 is actually only £26,866 taxable pay/salary.

So a total of £30,386. Tax due on that would normally be be £3577.20

droiderm

So, you are right, my pension comes off before it's taxed.
So my salary from employment for the remainder for this tax year will be 27,013
So,

Total Salary : 27013 + 3520 = 30,533.
Tax @ 20% (30,533-12,500) = 3,606.

Dividend Tax Due (50,000 - 30533) = 19, 467 basic rate remaining.

£2,000 x 0% = £0.00 (dividend nil rate)
£17,467 x 7.5% = £1,310.02 (dividend lower/basic rate)
£8,798 x 32.5% = £2,859.35 (dividend higher rate)

Total Tax Due : £7,775.37

Tax Expected to be Paid By PAYE : 3.943.80 (deducions from payslip pro rata).

Tax Outstanding : £3,831.57

Minus 1x payment on account thus far (1170) : £2661.57

Total Income (for child benefit charge) : 58,798.79

I think that saves a few quid

On-the-coast

I agree with others who've mentioned retaining your accountant for one last tax return.
How many children do you have?
your marginal rate of tax between 50&60K can be outrageous... and if you have a large family it can be very worth pushing income over that threshold (particularly if you are only partially into that bracket) into a pension if you haven't exceeded the allowances

Dazed_and_confused

Based on all the info in your posts the figures in your latest post look ok now. Total tax now due is £3831.

Remember that POA are totally separate to your Self Assessment calculation so your SA calculation will show the £3831. Once you have filed your return you need to wait a few days and then check your Self Assessment account and it will show something like this,

31:01:2020 1st POA for 2019:20 = £1,170
31:07:2020 2nd POA for 2019:20 = £1,170
31:01:2021 Balancing Payment for 2019:20 = £1,491

31:01:2021 1st POA for 2020:21 = £1915.50
31:07:2021 2nd POA for 2020:21 = £1915.50

Note the requirement for POA for 2020:21 is based purely on the Self Assessment liability for 2019:20.

If you believe the tax owed (over and above that deducted at source such as PAYE tax) will be less then you could make a claim to reduce the 2020:21 POA in line with what you think will be due.

So of for example you think you might owe £500 for 2020:21 then you could reduce each of the 2020:21 POA to £250.00.

Dazed_and_confused

On-the-coast is spot on regarding additional pension contributions.

Contributions into a personal pension or SIPP could work something like this,

£800 paid into a relief at source pension gets basic rate tax relief added by the pension company so you have £1,000 in your pension fund.

Your basic rate tax band is then increased by £1,000 so in your case you pay more 7.5% tax on the dividends and less 32.5% tax.

And your adjusted net income is reduced by £1,000 so, in your example, saving having to repay 10% of your Child Benefit. For a family getting Child Benefit for two children this could be c£170.

So you have £1,000 pension fund which really only cost £380.

droiderm

On-the-coast wrote: »

I agree with others who've mentioned retaining your accountant for one last tax return.
How many children do you have?
your marginal rate of tax between 50&60K can be outrageous... and if you have a large family it can be very worth pushing income over that threshold (particularly if you are only partially into that bracket) into a pension if you haven't exceeded the allowances

You are correct the marginal rate is outrageous . I don't know how they get away with that, but that's a different conversation!

I only have 1 child, so I guess the pain is not quite as terrible as it could be

droiderm

Dazed_and_confused wrote: »

Based on all the info in your posts the figures in your latest post look ok now. Total tax now due is £3831.

Remember that POA are totally separate to your Self Assessment calculation so your SA calculation will show the £3831. Once you have filed your return you need to wait a few days and then check your Self Assessment account and it will show something like this,

31:01:2020 1st POA for 2019:20 = £1,170
31:07:2020 2nd POA for 2019:20 = £1,170
31:01:2021 Balancing Payment for 2019:20 = £1,491

31:01:2021 1st POA for 2020:21 = £1915.50
31:07:2021 2nd POA for 2020:21 = £1915.50

Note the requirement for POA for 2020:21 is based purely on the Self Assessment liability for 2019:20.

If you believe the tax owed (over and above that deducted at source such as PAYE tax) will be less then you could make a claim to reduce the 2020:21 POA in line with what you think will be due.

So of for example you think you might owe £500 for 2020:21 then you could reduce each of the 2020:21 POA to £250.00.

I expect 19/20 to be perhaps the last year I need to complete self assessment , excluding perhaps bonus / overtime. So POA would need to be lowered.