Self assessment calculation query

Bookworm225

[Deleted User] said:

Bookworm225 said:

Annie1612 said:

Thanks for the replies!

Yes I transferred 10% to my husband as per the marriage allowance. The other deduction on my tax code is 973 for untaxed interest on savings. Hence my tax code is 1033N.

The figures I have included in my self assessment are £972 which is earnings from employment and £15819 which is interest from savings. When I add these together and take off my personal allowance of £10333, the starting rate for savings and the £1000 for savings allowance then I am £458 over these allowances. Does that make sense?

ok you are misunderstanding the tax code - it plays no part in your SA calculation 

your situation is 
gross income 16,791 of which 15,819 is interest

your personal allowance is 12,570 - 1,260 (marriage allowance transferred) = 11,260

as your employment income is below the PA you get the full 5,000 @ 0% band starter rate for savings interest.

On top of that you get the 1,000 tax free savings allowance 

so tax free "amount" totals 11.260 + 5,000 + 1,000 = 17,260 v gross income 16,791. Zero taxable income.

On that basis you will not have any tax to pay and the calculation showing 0 is correct 
if any tax has been deducted from your 972 employment earnings in this tax year then it should be refunded

Actually 11310 as opposed to 11260 - which I’m sure was a typo! 👍

oh the joys of doing long winded answers using on screen calculator rather than a spreadsheet where the numbers only need input once. Added to which one does not proof before posting and then edits multi times and loses the plot entirely 
i have therefore deleted my embarrassment and offer this instead:

your situation is 
gross income 16,791 of which 15,819 is interest

your personal allowance is 12,570 - 1,260 (marriage allowance transferred) = 11,310

as your employment income is below the PA you get the full 5,000 @ 0% band starter rate for savings interest.

On top of that you get the 1,000 tax free savings allowance 

so tax free "amount" totals 11,310 + 5,000 + 1,000 = 17,310 v gross income 16,791. Zero taxable income.

On that basis you will not have any tax to pay and the calculation showing 0 is correct 
if any tax has been deducted from your 972 employment earnings in this tax year then it should be refunded

if you want the mechanics of the calculation broken down:
employment income 972 -  972 from personal allowance = zero taxable earnings
15,819 interest, of which:
first 10,338 is covered by the remainder of the personal allowance (11,310-972)
the next 5,000 of interest is taxed at 0%
that leaves 481 (15,819-10,338-5,000) covered in full by your 1,000 personal savings allowance meaning zero taxable interest 

outcome: zero tax on earnings, zero tax on interest 

Annie1612

But my annual tax free allowance is £10337 it says in my account, not £12,570. The calculation in the self assessment is basing it on £12,570 without any deductions. 

Bookworm225

Annie1612 said:

But my annual tax free allowance is £10337 it says in my account, not £12,570. The calculation in the self assessment is basing it on £12,570 without any deductions. 

no, as explained the calculation does not use 10,337. It uses 12,570 less transferred allowance

your tax code is NOT your personal allowance for SA calculation purposes

Annie1612

Sorry if I’m being really thick here but where is the deduction for marriage allowance? This is the calculation. 

Bookworm225

in section 3 "tailor your return" did you click yes to:

Annie1612

Bookworm225 said:

in section 3 "tailor your return" did you click yes to:

Well no. I clicked “no” when it said do I want to claim the marriage allowance. Because the notes for that section say, if you are already claiming marriage allowance then click “no” instead of yes and I am already claiming marriage allowance. It’s reflected in my husband’s tax code. It does say if you already have the transfer in place….Im following their instructions…

So I need to tick the “yes” box after all?

[Deleted User]

Annie1612 said:

Bookworm225 said:

in section 3 "tailor your return" did you click yes to:

Well no. I clicked “no” when it said do I want to claim the marriage allowance. Because the notes for that section say, if you are already claiming marriage allowance then click “no” instead of yes and I am already claiming marriage allowance. It’s reflected in my husband’s tax code. It does say if you already have the transfer in place….Im following their instructions…

So I need to tick the “yes” box after all?

I believe that you must. Why not tick it and see how that alters your calculation?

Annie1612

So I tried ticking “yes” and filled in all the sections for the marriage allowance, but it just came up with “error - a transfer is already set up” which was what I actually thought anyway. I have no idea why it is not being deducted from my calculation section but there is nothing I can do about that it seems…. 😭

Dazed_and_C0nfused

Annie1612 said:

So I tried ticking “yes” and filled in all the sections for the marriage allowance, but it just came up with “error - a transfer is already set up” which was what I actually thought anyway. I have no idea why it is not being deducted from my calculation section but there is nothing I can do about that it seems…. 😭

That was answered at 1:22.

Annie1612

Dazed_and_C0nfused said:

Annie1612 said:

So I tried ticking “yes” and filled in all the sections for the marriage allowance, but it just came up with “error - a transfer is already set up” which was what I actually thought anyway. I have no idea why it is not being deducted from my calculation section but there is nothing I can do about that it seems…. 😭

That was answered at 1:22.

You are right 🤦‍♀️ thank you. I am getting MYSELF confused now. When I have done this I am going to put any savings in future in really low interest accounts so I never have to do this again. Or just give it away 😂