Personal Tax Question

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi

hoping someone can help clear this up for me ...

I have been doing lots of practice questions after being 2/3 of the way through my revision course.

Anyway, I completed one question only to find the answer in the back meant that the person was owed money from HMRC. The answer had deducted the tax suffered on the Dividend first, before tax suffered on Bank Interest and PAYE. My tutor told me that we should deduct Dividend last after everything else and if the amount left is less than the dividend, you just bring it back to NIL rather than creating a negative.

Do you think I'd be marked down in the exam for creating a NIL value rather than a negative one?

Thanks
Kelly

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Personal Tax Question

    It doesn't matter which way round you deduct the already paid tax.

    If the deducted at source tax is more than your actual liability then you are quite right to claim a repayment.

    Are you getting confused with indexation, taper relief and losses? :)

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Personal Tax Question

    I believe the 10% tax on dividends is a notional tax so therefore not repayable to the individual. If I'm right, then the refund is restricted to the actual tax suffered excluding the dividend.

Categories

Privacy Policy