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  • polymaff
    • #9
    • 1st Apr 16, 2:40 PM
    • #9
    • 1st Apr 16, 2:40 PM
    Here's a simple, visual, model of 2016/17.

    Draw a, to-scale, column representing your taxable income. The top part of the column is any dividend income, the middle part is any taxable savings income, and the bottom part is any other taxable income (e.g. earnings, pensions).

    Now draw lines across the column at 11,000, 16,000 and 43,000.

    The following statements apply, in the order given:-

    Anything below the 11,000 line is taxed at 0%.

    Any taxable savings income below the 16,000 line is taxed at 0%.

    If the total column exceeds the 43,000 line then up to a further 500 of taxable savings income is taxed at 0%. If the column doesn't exceed the 43,000 line then make that 500 of taxable savings income 1,000.

    The first 5,000 of dividend income above the 11,000 line is taxed at 0%.

    What is left is taxable - below the 43,000 line at basic rate, above at higher rate.

    I hope that this model covers the great majority of tax-payers. It can be tweaked to include certain complexities. For instance if you claim for qualifying charitable giving, just lift the 43,000 line by that amount. It is even relatively easy to allow for above 100,000 - but those folk can afford an accountant.

    (puts tin hat on )
    Last edited by polymaff; 01-04-2016 at 3:05 PM. Reason: Correction of "What is left is taxable .... "
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