Pension

John had trading income of 180000 in 2013/14. He also received dividend of 90000. He does not have any unused annual allowance
brought forward. What is John’s income tax liability for 2013/14.

The examiner said that the excess annual charge would be subject to income tax at the taxpayer’s marginal rate(s)
of income tax by treating the excess contributions as an extra amount of non-savings income received by the taxpayer.

This is the method that I normally calculated

Income Tax Liability
Non Saving
112010 x 20%…………………………22402
67990 x 40%…………………………..27196
……..
180000
………..
30000 x 40%………………………….12000
Dividend Income
20000 x 32.5%……………………….6500
80000 x 37.5%……………………….30000

Or
should I calculate like this
Income Tax Liability
Non Saving
112010 x 20%…………………………22402
67990 x 40%…………………………..27196
……..
180000
………..
Dividend Income
50000 x 32.5%…………………………16250
50000 x 37.5%…………………………18750
……….
100000
……….
Excess annual allowance
30000 x 45%…………………………….135000

Help me, Sir!