can someone help me about personal tax about saving starting rate

xiao

Hi everyone. rencently i do tax return online very confused one case ,it is not complicated, please help me sort is out.
salary : 1000
profit from property :7000
interest from banks : 32000
dividends: 4700
how much tax should paid?

my answer is
1000+7000-11000= -6000
32000-6000-5000-500=20500 *20%=4100
dividens less 5000 so is 0
so total personal tax for 2016/2017 is 4100

but from HMRC is 5100, it isn't consider 5 000 starting rate, is that correct?

many thanks.

Zoynal98

You are not calculating the PA deduction correctly on the Net Income. You have to deduct all the Non-savings income which is £8,000 (£11,000-£8,000=£3,000 PA left) then deduct £3,000 from the Savings which is £32,000-£3,000= £29,000, no more PA left so Dividend income will remain £4,700, this gives you the taxable income. From my understanding you will be eligible for the £5,000 starting rate as there is nothing taxable on the Non savings income, you will also be eligible for the £500 PSA as you are a higher rate tax payer.

Make sure you double check with HMRC first and ask how your tax liability was calculated.

xiao

Zoynal98 said:

You are not calculating the PA deduction correctly on the Net Income. You have to deduct all the Non-savings income which is £8,000 (£11,000-£8,000=£3,000 PA left) then deduct £3,000 from the Savings which is £32,000-£3,000= £29,000, no more PA left so Dividend income will remain £4,700, this gives you the taxable income. From my understanding you will be eligible for the £5,000 starting rate as there is nothing taxable on the Non savings income, you will also be eligible for the £500 PSA as you are a higher rate tax payer.

Hi Zoynal ,thank you for your replying , I found the correct answer ,share with you .
https://www.accountingweb.co.uk/tax/hmrc-policy/errors-in-tax-return-software-force-paper-filing

that means HMRC made a mistake .

Zoynal98

Ahh okay that makes sense