SA302 Tax calculation

alphason

Hi I am non resident and have used a 3rd party software to submit my self assessment to HMRC.

The software generates SA302 Calculation.

I have a small income from let property, minus my personal allowance it correcty calculates my total income is ZERO and Tax due is ZERO.

But in the SA302 it shows:
"Tax which would otherwise be chargeable on non-disregarded income £506.40"
I don't know where this figure comes from and what it means.

I have asked the 3rd party software provider, and they say its HMRC's calculation and its correct but couldn't really tell me what it is, they are trying to sell me their assisted package which I don't need to do the end figure of ZERO tax due is correct just don't know what this entry means. I have asked HMRC but no reply for 10 days, don't see any guidance on HMRC pages.

Is it possibly the tax I would have paid if I wasn't using my personal allowance, or something to do with relief for mortgage finance costs (even though none of the relief is used as my income is under the personal allowance)

Thanks

[Deleted User]

Does this help?

https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet/hs300-non-residents-and-investment-income-2020

alphason

purdyoaten2 said:

Does this help?

https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet/hs300-non-residents-and-investment-income-2020

Thanks, I'd not seen this before.
Just had a quick look, and it seems related to the tax I would have had to pay if I don't use the personal allowance?

"the tax charge for non-residents on investment income arising in the UK is restricted to the amount of tax, if any, deducted at source. If the tax charge is limited in this way, personal allowances will not be given against other income."

The only investment income I have is a very small amount of interest from my UK bank, this is shown as disregarded income on the SA302.

The SA303 says: "If you’re not resident in the UK, the tax you pay on all your income cannot be more than:

the amount of tax that would be chargeable on income, other than the ‘disregarded income’ shown below, but before the deduction of any personal allowances due plus the amount of tax deducted at source from the ‘disregarded income’"

I need to read it again to try and understand better, but the end figures of no tax due are correct on the return and that's what is important. I was just curious what this meant,
So looks like "Tax which would otherwise be chargeable on non-disregarded income £506.40" is the limit of tax liability if investment income is restricted to tax deducted at source and therefore would not get a personal allowance, which it's not in my case because my tax liability after personal allowance is lower. ??