Tax question

allegro120

I've completed SAR. Very straight forward. 
Net income from self-employment £3071
Taxable interest £6614
Net work pension £11621
Total: £21306

There's no other income or allowances or claims etc. The calculation at the end of the form shows that I owe HMRC £971.60 in tax. My calculation, based on £12570 personal allowance and £1000 savings allowance, is - I should owe £154.72 in tax.  Quite a big difference.  I went through the form again and again, can't find any mistakes.  Any suggestions where I could have gone wrong?

EthicsGradient

I'm not sure what "net" means in relation to your work pension, but I would calculate it as:
Pension+net self-employment income = £14,692
Band for starting rate for interest = 17570-14692=£2,878
Tax on earnings = 20% * (14692 - 12570) = £424.40
Tax on savings = 20% * (6614 - 1000 - 2878) = £547.20
total tax owed = £971.60
ie what HMRC's calculation is.

Middle_of_the_Road

allegro120 said:

I've completed SAR. Very straight forward. 
Net income from self-employment £3071
Taxable interest £6614
Net work pension £11621
Total: £21306

There's no other income or allowances or claims etc. The calculation at the end of the form shows that I owe HMRC £971.60 in tax. My calculation, based on £12570 personal allowance and £1000 savings allowance, is - I should owe £154.72 in tax.  Quite a big difference.  I went through the form again and again, can't find any mistakes.  Any suggestions where I could have gone wrong?

Using your method and figures would have given- £1,547.20   
i.e. 20 % of 7,736
You omitted the starter rate for savings.

https://www.moneysavingexpert.com/savings/tax-free-savings/

Dazed_and_C0nfused

Middle_of_the_Road said:

allegro120 said:

I've completed SAR. Very straight forward. 
Net income from self-employment £3071
Taxable interest £6614
Net work pension £11621
Total: £21306

There's no other income or allowances or claims etc. The calculation at the end of the form shows that I owe HMRC £971.60 in tax. My calculation, based on £12570 personal allowance and £1000 savings allowance, is - I should owe £154.72 in tax.  Quite a big difference.  I went through the form again and again, can't find any mistakes.  Any suggestions where I could have gone wrong?

Using your method and figures would have given- £1,547.20   
i.e. 20 % of 7,736
You omitted the starter rate for savings.

https://www.moneysavingexpert.com/savings/tax-free-savings/

And had a decimal point issue 😉

Middle_of_the_Road

Dazed_and_C0nfused said:

Middle_of_the_Road said:

allegro120 said:

I've completed SAR. Very straight forward. 
Net income from self-employment £3071
Taxable interest £6614
Net work pension £11621
Total: £21306

There's no other income or allowances or claims etc. The calculation at the end of the form shows that I owe HMRC £971.60 in tax. My calculation, based on £12570 personal allowance and £1000 savings allowance, is - I should owe £154.72 in tax.  Quite a big difference.  I went through the form again and again, can't find any mistakes.  Any suggestions where I could have gone wrong?

Using your method and figures would have given- £1,547.20   
i.e. 20 % of 7,736
You omitted the starter rate for savings.

https://www.moneysavingexpert.com/savings/tax-free-savings/

And had a decimal point issue 😉

That was the point I was hoping to highlight 🙂

allegro120

Thank you for your replies.  I can now see how I went wrong.

Castle

allegro120 said:

I've completed SAR. Very straight forward. 
Net income from self-employment £3071
Taxable interest £6614
Net work pension £11621
Total: £21306

There's no other income or allowances or claims etc. The calculation at the end of the form shows that I owe HMRC £971.60 in tax. My calculation, based on £12570 personal allowance and £1000 savings allowance, is - I should owe £154.72 in tax.  Quite a big difference.  I went through the form again and again, can't find any mistakes.  Any suggestions where I could have gone wrong?

That suggests that some tax has already been taken off.

Dazed_and_C0nfused

Castle said:

allegro120 said:

I've completed SAR. Very straight forward. 
Net income from self-employment £3071
Taxable interest £6614
Net work pension £11621
Total: £21306

There's no other income or allowances or claims etc. The calculation at the end of the form shows that I owe HMRC £971.60 in tax. My calculation, based on £12570 personal allowance and £1000 savings allowance, is - I should owe £154.72 in tax.  Quite a big difference.  I went through the form again and again, can't find any mistakes.  Any suggestions where I could have gone wrong?

That suggests that some tax has already been taken off.

Although with that income mix it's quite possible the gross and net of tax values are the same.

But net is an unusual way of referring to it.

allegro120

Dazed_and_C0nfused said:

Castle said:

allegro120 said:

I've completed SAR. Very straight forward. 
Net income from self-employment £3071
Taxable interest £6614
Net work pension £11621
Total: £21306

There's no other income or allowances or claims etc. The calculation at the end of the form shows that I owe HMRC £971.60 in tax. My calculation, based on £12570 personal allowance and £1000 savings allowance, is - I should owe £154.72 in tax.  Quite a big difference.  I went through the form again and again, can't find any mistakes.  Any suggestions where I could have gone wrong?

That suggests that some tax has already been taken off.

Although with that income mix it's quite possible the gross and net of tax values are the same.

But net is an unusual way of referring to it.

What I meant by "net" is that the figure doesn't include £8 of tax already taken off my pension.  Doesn't really make any difference.  My calculation was completely wrong - omission of starter rate and a decimal point issue.  I'm new to this.  When I was employed my tax was dealt with by the work, after that my income was below the threshold until last tax year when my work pension kicked in...  Looks like HMRC calculation is correct and I just have to send the form as is.  Thank you all for replying.