• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

calculate tax liability

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › calculate tax liability

  • This topic has 2 replies, 3 voices, and was last updated 6 years ago by Tax Tutor.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • August 7, 2018 at 6:11 pm #466618
    rizwankazmi
    Member
    • Topics: 3
    • Replies: 0
    • ☆

    Non Savings Income: 6000
    Savings Income: 6000
    Dividend Income: 180000

    question is in this case how should we calculate tax liability. since I am an additional rate tax payer should we we pay tax on dividend income @38.1% directly or should I first pay 7.5% till 33500 then @ 32.5% till 150000 and then @38.1 for the balance.

    August 7, 2018 at 8:36 pm #466721
    azamali
    Participant
    • Topics: 13
    • Replies: 33
    • ☆

    I apoligize to the tutor for answering the question again, but I feel that helping others is one the best ways for me to be prepared for my exam too,

    Sir, to answer your question, after going through the OT notes, I can say that Dividends are only taxed after NonSavings And Savings. Since both of those take 12000 off the 33500 basic rate, we can use that too. But firstly, 5000 from dividends will have 0%, then the amount upto 33500 will have the lower rate, then upto 150000 will take the higher rate, and finally above that it will have additional rate.

    Note : only 175000 of dividends are taxable, since 5000 are exempted

    August 12, 2018 at 10:00 pm #467473
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    The question that you pose strongly suggests that you have not worked through the OT lectures and notes as it indicates little knowledge from chapter 2!
    Once again Azam thank you for trying to help your fellow students but it’s probably best to leave this particular forum for me to answer.
    Rizwankazmi please work through the lectures and notes before raising queries as hopefully by doing so you will avoid a considerable amount of problems for yourself – you cannot work examples until you have studied the relevant lectures and notes!
    In this question you should both be aware that with this level of income there would be no PA available and no savings income nil rate band available, hence the income figures are also the taxable income figures and you will then work progressively through the relevant tax bands.
    Rizwankazmi please work through the lectures and notes for chapter 2 and then send me your answer to this question or tell me which part of the model answer to this question that you do not understand.
    Azam please note that we do not exempt £5,000 of dividend income – it is all taxable BUT the first 5,000 is at the dividend income nil rate band – this will therefore use up 5,000 of the 33,500 basic rate band!

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • dkessilfie on FM Chapter 1 Questions – Financial management objectives
  • ahmadhoney on ACCA Advanced Audit and Assurance (AAA) The Audit Report 3: Types of Audit Report
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Ken Garrett on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in