Effect of Box 9, page TC1, form SA110

Effect of Box 9, page TC1, form SA110

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Hi.

I enter an amount in box 9, page TC1, form SA110, but it makes no difference to the tax calculation produced by our software (Sage). HMRC tax calculation agrees (with no effect). Don't understand. I would have expected an entry in box 9 to have the same effect as an entry in box 7, but that probably means I have something wrong in my understanding, else I would expect there to be just the one box. But then I never understood why they have separate boxes for company dividends from unit trust dividends, so that was inconclusive.

I tried putting in a ridiculously large figure in box 9 and it still makes no effect. If it has no effect, what is the point of the entry? Any insights?

To save you looking it up, on form SA110 (tax calculation summary) page TC1, box 7 refers to underpaid tax for earlier years coded in current year, and box 9 refers to other outstanding debts coded in current year.

With kind regards

Clint Westwood

Replies (5)

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By Wall1690
02nd Feb 2016 10:52

I noticed this too.

An outstanding debt (Class 2 NI arrears) in code.  No PAYE tax suffered so effectively not collected. But not brought into SA either.  So still not collected?  What happens to the Class 2 arrears now?

 

Thanks (1)
By Tim Vane
02nd Feb 2016 11:14

Sounds like Sage is not doing the correct calculation. My software takes it into account correctly.

e.g.

£50,000 PAYE income (employment, pension etc)

£9,627 PAYE tax paid

Net tax due = zero

But, after adding a box 9 figure for outstanding debt, e.g. £3000

Only £6,627 PAYE is now available to offset the tax owed, so the tax due is now £3000 (as you would expect).

I suggest you get better software.

EDIT: @wall1690 In respect of your post, obviously there is no effect of the debt coded out if no PAYE has actually been paid!

In all cases note that the debt has nothing to do with the current year's liability, so other than reducing the PAYE offset against current year liability, it will not appear anywhere in the tax calculation.

Thanks (1)
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By nogammonsinanundoubledgame
02nd Feb 2016 11:17

@Tim

The problem, Tim, is that HMRC agrees with Sage.  Their own SA302 does NOT include box 9 figures in the tax calc.  At least not for my example case.  And when I phoned Sage they confirmed (after passing the query up a few tiers) that the entry is just a disclosure note.  Not sure that I necessarily believe either Sage or HMRC, mind.

Any other voters?

With kind regards

Clint Westwood

PS your EDIT crossed with my post.  Understood now.  Would not have ranked it as obvious.

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By Tim Vane
02nd Feb 2016 11:19

p.s.

On the other matter mentioned, the reason there is a separate box for company dividends and unit trust dividends is that company dividends are qualifying distributions and unit trust dividends are not. The distinction is important when calculating any relief on the redemption of bonus shares.

Thanks (1)
By Tim Vane
02nd Feb 2016 11:28

Well, I don't use HMRC software, but just had a bash at it and it worked as expected.

(Though I am now reminded why I don't use it!)

 

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