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Post Info TOPIC: Higher rate taxpayer calcs
tonys


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Higher rate taxpayer calcs
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Hi

Could anyone cast there eye over this for 22/23 YE? I am (pretty) confident with the Dividends but not the Tax due on Pension income.

Gross Income from State Pension10,926.00 
Gross Income from Teachers Pension25,114.00 
Dividend income32,804.00 
Total Income 68,844.00
   
Personal Allowance -12,570.00
   
Total Taxable income 56,274.00
   
Taxed at 40% (68844-12570-37700) 18,574 7,429.60
Taxed at 20% (10,926+25114-18574)17,466 3,493.20
Less Tax paid  -4,633.00
Tax Due in Pensions 6,289.80
   
Dividend Income32,804.00 
Dividend Allowance-2,000.00 
Taxable Dividend total30,804.00 
Dividends Taxed at 33.75% 18,574 (as above) 6,268.73
Dividends Taxed at 8.75% (30,804-18,574) 12,230 1,070.13
Tax Due on Dividends 7,338.85
   
Total Tax due 2022/23 13,628.65

Thanks in advance.



-- Edited by tonys on Thursday 15th of June 2023 02:05:03 PM



-- Edited by tonys on Thursday 15th of June 2023 02:35:43 PM

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Artois


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I make the total tax as £12,032.84



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Doug

These are only my opinions of how I see things and therefore should not be taken as advice
Leger


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Hi Tonys.  

You don't apply 40% to the pensions.  Use up as much of the basic rate as you can then apply the remainder of BR followed by HR to the dividends.  This is how my software has calculated it.

bkn calc.jpg

 

 



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
tonys


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Thank you so much.  I knew that the calculation of Tax wasn't right, but I don't pretend to be qualified to complete higher rate returns, this was an elderly neighbour asking a favour.  (I know, never do a favour, but she is 93 and VERY frail) Had I have know it was higher rate, I wouldn't have touched it!

 



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tonys


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Having re worked this it makes perfect sense now, much appreciated, I assume the tax paid via Pension of £4,633 would reduce the tax due £4,694 to £61? (she paid tax on one of the pensions per my original workings and the 2 pension figure were GROSS.)



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Leger


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Yes, I should have included the tax deducted at source in my calculation, which would have then showed £61 tax due on pensions.



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
tonys


Senior Member

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Thanks John.  I feel like I really learned something there, maybe doing the favour wasn't so bad an idea after all!



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