The annual allowance charge is taxed as the top slice of non-savings income. Shouldn’t the Annual Allowance Charge be taxed after dividend income? Or do we tax it after dividend income but at the rates used for non-savings income?
The correct treatment would indeed be to calculate the AA Charge after computing the tax on the taxable income of the taxpayer using non savings rates, but we adopt the method as shown by the technical articles produced by the examining team which is absolutely fine for our syllabus and is quicker and easier to do