Personal tax task 1.4 HELP PLEASE

Joanna07

I am having problem with task 1.4 - PTAX FA2014. I have no idea where the last figure is coming from.
Total employment income £29805, received interest from ISA, building society £856 and £1314 dividends.
I need to calculate tax deducted at source and any additional tax payable for each type of income. Tax band £31785
ISA - exempt
Building society £856 plus £214 tax additional tax payable 0
Dividends £1314 plus 146 tax additional tax payable £123.75? How is it calculated?

DaveyBoy

Hi Joanna, I am sitting this exam this afternoon and luckily I have studied this question a fair few times. The 29805 is Income after Personal Allowance has been deducted if I remember right, therefore.

Employment Income £29805 at 20% = £5961 (no additional tax payayable)

Savings Income £1070 at 20% = £214 (no additional tax payable)

Dividend Income £910 at 10% = £91

(£31785 basic band is hit)

Dividend Income £550 at 32.5% = £178.75

So Dividend Income is where the variance lies, in total you should be paying £267.75, whereas you have actually paid £146.00, difference between the 2 amounts £123.75

Hope this helps

Joanna07

Helps a lot Thank you very much