is this new savings allowance available to higher rate tax payers eg salary £11k dividends £45k
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No. Because there is not any savings income (as defined, which does not include dividend income) in your example.
update
i think it works currently £5k of interest @ 0% is available if your total non-savings & investment income is below £15,600
thx P
you got there before I mentioned the £5k interest paid on a DLA substantially in credit (funding business assets)
Before?
Before you mentioned a fact that you should have included in your opening post you mean.you got there before I mentioned the £5k interest paid on a DLA substantially in credit (funding business assets)
Then £4,500 of the interest
Then £4,500 of the interest is taxable at 20%, £22,000 of the dividends are taxable at 7.5%, and £18,000 of the dividends are taxable at 32.5%. The £5,000 0% savings rate band is not available.
That is on the assumption that you are considering 2016/17.
If it were 2015/16, then £400 of the salary and £5,000 of the interest is taxable at 20% and £21,253 of the dividends are taxable at a further 25%.
Perhaps this already exists ...
... but this conversation, and the one earlier in the year regarding interpretation of the new Personal Savings Allowance, really makes the case for getting HMRC to put up a dummy SA100 for 2015/16 - and for succeeding years - as soon as possible. Such a dummy would include everything but the ability to submit. It would certainly help us to fathom out the eccentricities of some of the recent budgets. Would be useful within HMRC, too, I suspect.
Yes it does already exist. The draft forms, computation workbooks and SA302 templates for 2015/16 are all available on the HMRC website and have been for some months. Software suppliers are already testing their products for next year.
@Tim
Thanks, Tim.
I think that I'm up to speed with the "HMRC calculators and tools" and the draft physical forms for 2015/16 - but not of something that does what I described. For instance, the HMRC Detailed Tax Checker doesn't allow consideration of Dividend Income. At one time that was just annoying, but when the tax on savings is a function of dividend income, this particular calculator will be useless. Am I missing something that is more along the comprehensive lines I was describing?
This page has a very long document describing the full 2016 SA302 layout and calculation.
https://www.gov.uk/government/publications/self-assessment-technical-spe...
There is also a sample spreadsheet. Somewhat beyond my spreadsheeting abilities so I don't claim to be able to follow it all - it is clearly aimed at software developers rather than humble accountants - but anybody can stick numbers in and see what works.
A long, but informative document, Tim..
..although I'd prefer my suggestion to the rather unfriendly spreadsheet. I guess, though, that if HMRC did provide what I suggested, the third-party software providers might be out of business. I hope that a similar one to the document you kindly pointed me toward, but for 2016/17, appears a deal less than 12 months after the release date of this one.
It will take more than the hour or so I've spent browsing it, but the document suggests to me that if the case in hand is for 2015/16, the liability on gross savings income of £5,000 would be £400 @ 20%.
It is...
... a slightly laborious task to take the Word document with the full calculation and convert that to a spreadsheet model, but it can be done, and once you have done the first year it is then much easier to update for future years by following the change log...although I'd prefer my suggestion to the rather unfriendly spreadsheet. I guess, though, that if HMRC did provide what I suggested, the third-party software providers might be out of business. I hope that a similar one to the document you kindly pointed me toward, but for 2016/17, appears a deal less than 12 months after the release date of this one.
It will take more than the hour or so I've spent browsing it, but the document suggests to me that if the case in hand is for 2015/16, the liability on gross savings income of £5,000 would be £400 @ 20%.
I noticed this year that now Class 2 is part of the 15-16 return the fiull comp includes a new stage to calculate the overriding maximum NIC where you have a mix of Classes 1, 2 & 4 in the year.
Agreed
... a slightly laborious task to take the Word document with the full calculation and convert that to a spreadsheet model, but it can be done, and once you have done the first year it is then much easier to update for future years by following the change log.
I noticed this year that now Class 2 is part of the 15-16 return the fiull comp includes a new stage to calculate the overriding maximum NIC where you have a mix of Classes 1, 2 & 4 in the year.
An informative task though, the most challenging aspect being their choice of background colour for the V5.0 updates. Who on planet HMRC thought that black text on a very dark brown background was a good idea?
I hope...
I noticed this year that now Class 2 is part of the 15-16 return the fiull comp includes a new stage to calculate the overriding maximum NIC where you have a mix of Classes 1, 2 & 4 in the year.
I hope that it can deal with both NIC maxima Paul.
Well, £400 @ 20% is certainly
Well, £400 @ 20% is certainly what my software says for 2016.
I'm not sure I agree that with your suggestion that HMRC having a calculator would put the software providers out of business. It's not exactly going to make most users of commercial software suddenly stop using it. I suspect that most tax software will have the 2017 computations available early next year if they haven't already.
Mine, too, Tim
I made that third-party comment a bit tongue-in-cheek. There's plenty of added value from the third party suppliers. As for the 2016/17 - I wonder how many would commit time until HMRC commit to documents such as the one you pointed me toward? There are some significant philosophical changes coming and threads like this one - not to mention AW articles - illustrate how difficult it can be to make assumptions as to how things "should be" when, by definition, HMRC states how it "will be" - even if it means calling a circle a square.
The draft legislation gets published on Wednesday and no doubt the software houses will be poring over it in detail like everyone else. Of course the draft legislation could be amended later but I suspect that in these areas it is likely to remain substantially unchanged so the commercial software suppliers will be confident enough to update their software.
Yes, but ...
Yes, but the devil is always in the "should be"/"will be" implementational detail, Tim. For instance, earlier this year, I asked HMRC if a simpler definition of the PSA would be to say that it is a rebate of up to £200 of assessed tax on taxable savings income - claimable only by basic and higher rate taxpayers. Yes, they said. Now (we think) that we know that it is far more complex - dare I say eccentric? - than that!
We'll see.
I agree. Having looked at the legislation that (for the most part) we already have, my previous comments should have been that none of the interest income is taxable in 2016/17, but my figures are then already as stated.
If the figures relate to 2015/16, then £400 of the interest is taxable at 20% (along with £400 of the salary) and my figures are then as already stated.
The starting rate band is available in the circumstances outlined by Nick, and I was incorrect previously to say that it was not.