Hi, I would appreciate it if you shared the link to the practice exam for TX.
A
Artermist·
May I know how shall i get $12,570 in Lecture 1 Example 1?
O
Olayinka·
Please how do we arrive at 22,270 @ 20% for Example 3 when calculating the Tax liability
S
Sudhir·
Non Savings Income - 14930 + Savings Nil band rate 500 (because income exceeds 37,700) = 15430. Balance available in Basic rate is slab is 22,270 (37,700 - 15,430)
W
William·
In the solution for practice question 1, why was the remainder of the Dividend thus: 5000.00 divided into Basic rate and higher rate instead of just using the high rate of 33.75%
S
Sharifa·
Is there an error I'm example #2? The non savings taxable income of £14,930 exceeded £5000 therefore the savings nil rate band should not be applicable. I'm confused.
R
Rubin·
Exactly the question I had as well.
M
mrjonbainModerator·
I am not in a position to watch the lecture at the moment. However, it is TAXABLE non savings income that can't be over £5000. If it is over this limit then the savings stater rate is wiped out. See following link for details-
The £1,000 deducted is based on this rule (2):
For basic rate taxpayers, the savings income nil rate band for the tax year 2022-23 is £1,000,
and for higher rate taxpayers it is £500. Additional rate taxpayers do not benefit from any
savings income nil rate band.
The one you got confused with is this rule (1):
Savings income benefits from a 0% rate. However, the starting rate only applies where savings
income falls within the first £5,000 of taxable income. If non-savings income exceeds £5,000,
then the starting rate of 0% for savings does not apply.
Savings income in excess of the savings income nil rate
If you look at Example 4, might have a better understand, if rule (2) applies, the taxpayer would get a £5,000 deduction.
M
mrjonbainModerator·
J8542, I have not watched the video. I suspect you are right in the main. However, you are wrong when you say if non-savings income is greater than £5000 that the savings starter rate does not apply. I will quote directly from government site from link I gave above-
"If your other income is less than £17,570
Your starting rate for savings is a maximum of £5,000. Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.
Example
You earn £16,000 of wages and get £200 interest on your savings.
Your Personal Allowance is £12,570. It’s used up by the first £12,570 of your wages.
The remaining £3,430 of your wages (£16,000 minus £12,570) reduces your starting rate for savings by £3,430.
Your remaining starting rate for savings is £1,570 (£5,000 minus £3,430). This means you will not have to pay tax on your £200 savings interest." If TAXABLE non-savings income is greater than £5000 the savings starter rate will be unavailable.
J
JC·
mrjonbain, I copied the text straight from the manual. And I believe we are both correct.
"the starting rate only applies where savings income falls within the first £5,000 of taxable income"
In order to have a taxable income of £5,000:
£12,570 (personal allowance) + £5,000 which is £17,570.
To be more accurate, the text that I quoted could be "If taxable non-savings income exceeds £5,000, then the starting rate of 0% for savings does not apply."
Thanks for your input, I have a better understanding now :)
H
Hylary·
Hi there ,the working of example 6 part 2 ( the example that has Daisy), if possible, i would like to know how the 230GBP and 12,270 came to be?
thank you in advance
F
Fatima·
In example 13, how will Elliot benefit? If the tax band hadn't been extended to 39700, she would be paying 7540 but with increased band she will be paying 7940. That's a 400 pound increase in tax liability.
S
Samiullah·
In example number:
14
Adjusted net income exceeds 125,140 and
15
Adjusted net income exceeds 100,000
Why there is a difference it should be the same as the example number 14/ £ 125,140.
F
Farwa Zahra·
hello
in example 16 (Elton and david) david's tax liability becomes nil when he uses his personal allowance (10000-12570=nil), so why doesn't elton also use his personal allowance to be rid of his liability i.e. his 10000-12570...?
A
Amoury·
The election is only available when both taxpayers are either
just basic rate taxpayers or non-taxpayers. The election is only likely to be made when one spouse is
a non-taxpayer and has an amount of unused PA that would otherwise be wasted and the other
spouse is only a basic rate taxpayer.
Given that Elton is a higher Tax Payer, this election isn't possible
R
Rafeh·
What is the admin chapter the tutor keeps referring to ? I studied the first chapter and I didn't see any p60 or p11d.
I
incepaul·
Tax will provide you with a good foundation - but you fill find the ATX syllabus has a lot more content. I would suggest investing in some learning content as well as revision kit.
A
Andrea·
Hello - Is there any reason why I cant see the lectures? I'm just starting on lectures chapter 2
O
opentuition_teamAdmin·
No idea, try another browser or device, video works fine
D
Dheera·
Yes it’s blur when opened on laptop however on Mobile it’s clear
R
roshni·
Hi,
In practise question 1 - Kate.
how did we get the £2,270 x 8.75% for dividends?
A
akazakov·
8.75% rate is applicable up to the BRB limit of £40,200 (refer to W1). Look at the "Income Tax" computation section in the answer and add up all income above and including £2,270, you will get £40,200 in total. The remaining part of the dividend income is taxed at the higher rate.
S
Sanjanah·
Thanks, was wondering how to get that amount.
S
sabazareem·
In Example 12, after applying basic tax rate of 20% on 37700, we didn't apply nil rate band (500 @ 0%) as Kathy is a high rate tax payer
S
Saba·
Sorry i got that. No savings income
N
Naseam·
Question 3 of the practice questions - my income tax liability came to 56,638?
J
Jea Marie·
I got this too. Must be a typo or something since 56,638 is indeed the sum of everything on Practice Answers.
S
Shub·
Hi Mam,
I am planning to sit for ATX-UK next. Since the lectures of ATX are not available, I am planning to watch lectures for TX-UK and then solve revision kit for ATX-UK. Just needed your guidance if I am on the right path.
Thanks for the lectures.
I
incepaul·
Tax will provide you with a good foundation - but you fill find the ATX syllabus has a lot more content. I would suggest investing in some learning content as well as revision kit.
are those lectures ok for June 2024
https://www.gov.uk/apply-tax-free-interest-on-savings
For basic rate taxpayers, the savings income nil rate band for the tax year 2022-23 is £1,000,
and for higher rate taxpayers it is £500. Additional rate taxpayers do not benefit from any
savings income nil rate band.
The one you got confused with is this rule (1):
Savings income benefits from a 0% rate. However, the starting rate only applies where savings
income falls within the first £5,000 of taxable income. If non-savings income exceeds £5,000,
then the starting rate of 0% for savings does not apply.
Savings income in excess of the savings income nil rate
If you look at Example 4, might have a better understand, if rule (2) applies, the taxpayer would get a £5,000 deduction.
"If your other income is less than £17,570
Your starting rate for savings is a maximum of £5,000. Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.
Example
You earn £16,000 of wages and get £200 interest on your savings.
Your Personal Allowance is £12,570. It’s used up by the first £12,570 of your wages.
The remaining £3,430 of your wages (£16,000 minus £12,570) reduces your starting rate for savings by £3,430.
Your remaining starting rate for savings is £1,570 (£5,000 minus £3,430). This means you will not have to pay tax on your £200 savings interest." If TAXABLE non-savings income is greater than £5000 the savings starter rate will be unavailable.
"the starting rate only applies where savings income falls within the first £5,000 of taxable income"
In order to have a taxable income of £5,000:
£12,570 (personal allowance) + £5,000 which is £17,570.
To be more accurate, the text that I quoted could be "If taxable non-savings income exceeds £5,000, then the starting rate of 0% for savings does not apply."
Thanks for your input, I have a better understanding now :)
thank you in advance
14
Adjusted net income exceeds 125,140 and
15
Adjusted net income exceeds 100,000
Why there is a difference it should be the same as the example number 14/ £ 125,140.
in example 16 (Elton and david) david's tax liability becomes nil when he uses his personal allowance (10000-12570=nil), so why doesn't elton also use his personal allowance to be rid of his liability i.e. his 10000-12570...?
just basic rate taxpayers or non-taxpayers. The election is only likely to be made when one spouse is
a non-taxpayer and has an amount of unused PA that would otherwise be wasted and the other
spouse is only a basic rate taxpayer.
Given that Elton is a higher Tax Payer, this election isn't possible
In practise question 1 - Kate.
how did we get the £2,270 x 8.75% for dividends?
I am planning to sit for ATX-UK next. Since the lectures of ATX are not available, I am planning to watch lectures for TX-UK and then solve revision kit for ATX-UK. Just needed your guidance if I am on the right path.
Thanks for the lectures.