Tax calculation

Isthisforreal99

And what have HMRC calculated as 24/25 tax owed?

jennifernil

An additional £1657.99, a total of £7038.99, plus payments on account.

probate_slave

Like you, my figure comes out slightly above the HMRC one. The discrepancy is precisely £102.48 which means either that the bank interest has been overlooked, or that the full PSA of £1,000 has been applied to it for some reason.

Gross non-savings income = 12,817 + 27,735 + 5,217 = 45,769
Reduced by personal allowance = 45,769 - 12,570 = 33,199
Extended basic rate band = 11,685 + (10/8 x 772) = 12,650

Tax on non-savings:
Starter rate  2,306 @ 19% = 438.14
Basic rate 12,650 @ 20% = 2,530
Intermediate rate  17,101 @ 21% = 3,591.21
Higher rate 1,142 @ 42% = 479.64

Tax on savings:
Foreign interest (reduced by PSA of £500)  244 @ 42% = 102.48
Total tax assessed for 2024/25 = 7,141.47
Less tax already paid = 5,381
Additional tax due = £1,760.47

eskbanker

probate_slave said:

Like you, my figure comes out slightly above the HMRC one. The discrepancy is precisely £102.48 which means either that the bank interest has been overlooked, or that the full PSA of £1,000 has been applied to it for some reason.

Gross non-savings income = 12,817 + 27,735 + 5,217 = 45,769
Reduced by personal allowance = 45,769 - 12,570 = 33,199
Extended basic rate band = 11,685 + (10/8 x 772) = 12,650

Tax on non-savings:
Starter rate  2,306 @ 19% = 438.14
Basic rate 12,650 @ 20% = 2,530
Intermediate rate  17,101 @ 21% = 3,591.21
Higher rate 1,142 @ 42% = 479.64

Tax on savings:
Foreign interest (reduced by PSA of £500)  244 @ 42% = 102.48
Total tax assessed for 2024/25 = 7,141.47
Less tax already paid = 5,381
Additional tax due = £1,760.47

Scottish income tax payers only have the PSA reduced if their total taxable income exceeds the UK threshold of £50,270, even if they're in the 42% band for non-savings income.  Not sure if that explains the discrepancy, but your figures don't really illustrate any discrepancy as presented, are some key figures omitted?

probate_slave

Yes, that would certainly explain the discrepancy. The bank interest is tax free. My amounts of total tax and additional tax above, both reduced by 102.48, now equal the HMRC figures quoted by the OP.

Dazed_and_C0nfused

probate_slave said:

Like you, my figure comes out slightly above the HMRC one. The discrepancy is precisely £102.48 which means either that the bank interest has been overlooked, or that the full PSA of £1,000 has been applied to it for some reason.

Gross non-savings income = 12,817 + 27,735 + 5,217 = 45,769
Reduced by personal allowance = 45,769 - 12,570 = 33,199
Extended basic rate band = 11,685 + (10/8 x 772) = 12,650

Tax on non-savings:
Starter rate  2,306 @ 19% = 438.14
Basic rate 12,650 @ 20% = 2,530
Intermediate rate  17,101 @ 21% = 3,591.21
Higher rate 1,142 @ 42% = 479.64

Tax on savings:
Foreign interest (reduced by PSA of £500)  244 @ 42% = 102.48
Total tax assessed for 2024/25 = 7,141.47
Less tax already paid = 5,381
Additional tax due = £1,760.47

The Scottish government doesn't have the right yet to set tax rates on savings interest so they rates are 0%, 0%, 20%, 40% or 45%.

It can't be taxed at 42%.

jennifernil

Thanks for that information, that explains the difference.

interestingly, today OH had 3 envelopes from HMRC, one from 19th November, one from 20th November, both with new code numbers for 25/26, and an undated Tax Calculation with all the numbers as above.  The bank interest was indeed taxed at 0%.   I had searched in the bit for the Scottish bands etc, and there was nothing that I could see regarding the fact it could not be taxed differently from in England and Wales.

However he will need to ring them soon as the accompanying text claimed that he had requested that the tax be collected via his code number,  which is not what was requested, and he will be paying as said in the statement.

eskbanker

jennifernil said:

I had searched in the bit for the Scottish bands etc, and there was nothing that I could see regarding the fact it could not be taxed differently from in England and Wales.

You pay Scottish Income Tax if you live in Scotland. It’s paid to the Scottish Government.

Scottish Income Tax applies to your wages, pension and most other taxable income.

You’ll pay the same tax as the rest of the UK on dividends and savings interest.

https://www.gov.uk/scottish-income-tax

jennifernil

Ah,thanks, too busy reading further down to read that first bit!