Task 4 on Investment Income Additional Tax Payable

dalmatian

i am stuck - help please:
Q: 2 taxpayers receive income from investments. The table below shows the income received from the investment and the tatxpayers other taxable income. Complete the table to show the taxable income from investments and any additional tax that is payable on the investment income.
Taxpayer Source of inv income Inv income received Other taxable income Taxable Inv Income Addit. Tax payable
Joey Buildng society 1840 30000 2300 ????
Jules Dividend 864 74500 960 ????
How do you calculate the additional tax payable.
Many thanks!

dalmatian

https://www.aat.org.uk/system/files/study_resources/L4-Diploma-Accounting-PTAX.pdf

PeterC

The example you are using relates to 2014/15

Jules's taxable income is well into the higher rate band.
There is a 10% tax credit on the £960 dividend, so he needs to pay another 22.5%
960x22.5%=£216

Joey's total taxable income is 30,000+2,300=£32,300
This is £435 above the basic rate limit of £31,865
20% was deducted at source, so he needs to pay another 20%
435x20%=£87

There is a slightly easier example of this in the practice exam at:
meadowgatetraining.co.uk/taxation/

dalmatian

Ah....i get it now! Thanks very much, again!

PeterC

You're welcome!