OK, this is just theoretical, but it cropped up on another forum and produced an array of answers. It took me a while to get my head round it but you may be amazed at the correct answer
Tax year 2016/17
Salary 38k Dividends 60k
How much income tax do I pay? Show your workings please.
And Joanne, how could you possibly be just a mere bookkeeper
EDIT: Added the word income to tax.
-- Edited by Leger on Monday 24th of July 2017 11:31:48 PM
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
OK, this is just theoretical, but it cropped up on another forum and produced an array of answers. It took me a while to get my head round it but you may be amazed at the correct answer
Tax year 2016/17
Salary 38k Dividends 60k
How much tax do I pay? Show your workings please.
And Joanne, how could you possibly be just a mere bookkeeper
I know what the bit is that people invariably miss and yes, it's not as clear cut as it first seems is it! (Wish I'd got time to play but inundated at the mo )
On the second point I've said it before and I'll say it again... She's got a Chartered qualification written all over her.... And once she's cleaned that off she should really consider taking one as well.
Right, shush before she realises that we're complimenting her... Gotta be careful or we'll lose her to Aweb.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
And Joanne, how could you possibly be just a mere bookkeeper
Right John, cut it out!!!
Actually I made a right old tit of myself and dont you dare prove that fact to folk or you are literally a dead man!
Whilst not wanting to spoil your fun altogether at this stage, I think I must say that I think Doug has overcharged by £625 (if my numbers are correct). Sorry Doug, if Im right.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I know what the bit is that people invariably miss and yes, it's not as clear cut as it first seems is it! (Wish I'd got time to play but inundated at the mo )
On the second point I've said it before and I'll say it again... She's got a Chartered qualification written all over her.... And once she's cleaned that off she should really consider taking one as well. Ok and you can cut it out as well!!Certified more like, or perhaps just should be! Doesnt my existing certification count?! lol.
Right, shush before she realises that we're complimenting her... Gotta be careful or we'll lose her to Aweb. Oops!
You boys are such smooth talkers!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Whilst not wanting to spoil your fun altogether at this stage, I think I must say that I think Doug has overcharged by £625 (if my numbers are correct). Sorry Doug, if Im right.
Hi Joanne, no need to be sorry I have never had a problem with being wrong as long as I learn from the mistake but will be interested to know the answer and what I missed after everyone else has had a go!!
Luckily I do have PII in place if the above client decides to file a lawsuit
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I know what the bit is that people invariably miss and yes, it's not as clear cut as it first seems is it! (Wish I'd got time to play but inundated at the mo )
On the second point I've said it before and I'll say it again... She's got a Chartered qualification written all over her.... And once she's cleaned that off she should really consider taking one as well. Ok and you can cut it out as well!!Certified more like, or perhaps just should be! Doesnt my existing certification count?! lol. just worth noting here that despite what ACA's may say, ACCA is also a Chartered Qualification.... Hint!!!!
Right, shush before she realises that we're complimenting her... Gotta be careful or we'll lose her to Aweb. Oops!... Good, you've not spotted the bungie rope that we've had tied to you yet
You boys are such smooth talkers!
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
And Joanne, how could you possibly be just a mere bookkeeper
Right John, cut it out!!!
Actually I made a right old tit of myself and dont you dare prove that fact to folk or you are literally a dead man!
Whilst not wanting to spoil your fun altogether at this stage, I think I must say that I think Doug has overcharged by £625 (if my numbers are correct). Sorry Doug, if Im right.
To be fair, I would have arrived at exactly the same answer as you did*, and indeed Doug has. What did make me chuckle though was you saying you ignored your own advice about HMRC guidelines. I don't think you made a tit of yourself though, it taught me something new today as well.
Shaun, I have to agree that Joanne is well worthy of chartered accountant status, her knowledge is incredible. I think the main difficulty, definitely with regards to ACCA, is the limitations placed upon her while studying. The mere bookkeeper comment was a reference Joanne made of herself, which also made me chuckle. Pity you're too busy, I would have liked to see your analysis, although I'm guessing by your comment that you know the more beneficial structure anyway.
Doug, a little hint in that you should work it out to the advantage of the taxpayer, legally of course. As Joanne says, there's a further saving of £625 to be made in income tax. I've also amended my op to say income tax, as it wasn't clear enough and I noticed your caveat.
I'll wait until Tuesday evening to see if anyone else wants to work it out before revealing it.
* The thread I referred to had a more detailed figure, which I've rounded down to simplify it.
-- Edited by Leger on Monday 24th of July 2017 11:30:45 PM
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
John and Shaun - I dont take compliments very well as Im not that used to them, but just to say a huge thank you for your kind words!! Blushing at home, where no-one can see!
Key to this one is the the Income Tax act itself - a small but very important line - section 25 (2)
Good to see at least some of the more well known bits of software will do the calculation allowing for this short sentence! Im thinking doing the calculations on a bit of paper is way more interesting then using software.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Good to see at least some of the more well known bits of software will do the calculation allowing for this short sentence! Im thinking doing the calculations on a bit of paper is way more interesting then using software.
H Joanne
That was the question I was going to ask, I am starting to move clients onto Taxfiler now but was using the HMRC software before to submit returns
Be interesting to know if HMRC allow for this calculation on their own software?
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Good to see at least some of the more well known bits of software will do the calculation allowing for this short sentence! Im thinking doing the calculations on a bit of paper is way more interesting then using software.
H Joanne
That was the question I was going to ask, I am starting to move clients onto Taxfiler now but was using the HMRC software before to submit returns
Be interesting to know if HMRC allow for this calculation on their own software?
Hi Doug and Joanne
Amazingly enough HMRC returns the correct result. I tested it yesterday out of curiosity.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
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