Member Since: 8th Jan 2002
One of the founding partners of The Professional Training Partnership, Tim is also a director of PTP, PTP Interactive and Absolute Accounting Software and is chairman of The Tax Club. He is the author of three chapters in Tolley's Tax Planning and presenter of TAXtv.
2nd Oct 2019
The HMRC calculator (and as far as I know every commercial tax return software package) calculates the top slicing relief as £5,600.
The correct figure (according to Judge Mosedale in Silver - and me) is £7,031.
So the estate is being overcharged by £1,431.
HMRC will not accept that they are wrong until the litigation is completed. The Upper Tribunal have aked for availability dates from February to May 2020.
See also https://www.accountingweb.co.uk/tax/hmrc-policy/hmrc-digs-in-over-top-sl....
12th Sep 2019
The Tribunals service has now asked for "dates to avoid" for December 2019 through May 2020. We're getting closer ...
10th Jul 2019
Yes - appeal lodged 13 June 2019.
4th Mar 2019
Put the details into https://www.absolutetax.co.uk/account/top-slicer-tool-trial and email me if you have any questions.
24th Jan 2019
Thanks Paul. My company is Absolute (www.absoluteexcelvatfiler.co.uk) not PTP!
20th Sep 2018
Export to a csv file then link the cells to our excel vat filer.
20th Sep 2018
My software company (Absolute) has produced a very simple excel worksheet that will comply fully with MTD for VAT (no cut and paste required) and can be used to file any VAT return as long as the user has already prepared the relevant figures. Groups, partial exemption, monthly - they make no difference to the basic filing.
5th Sep 2018
These figures demonstrate how crazy the taxation of chargeable event gains is.
The current SA calculator used by HMRC and your tax return software has two errors that affect this scenario. The first is in the calculation of the top slicing relief (TSR). HMRC have now agreed in Exclusion 81 that in this sort of case they have not taken the savings rate band into account. The second is in the allocation of allowances. The PA should be allocated in a way that minimises the s23 ITA 2007 liability which is after TSR but before the notional basic rate credit on chargeable event gains. But HMRC allocate the allowances to minimise the tax liability after instead of before the notional basic rate credit. (HMRC are trying to reduce the taxpayer's net liability by not allocating allowances to the chargeable event gain as that would reduce the notional basic rate credit. Sweet of them, but Counsel agrees with me: they are wrong.)
For 2017-18 and a £40,000 dividend the correct net tax is £4,250 against your software and HMRC's £1,663. With a £45,000 dividend the 2017-18 tax is £5,875 aginst HMRC's £10,917 (which has prompted your query). HMRC have not yet agreed my calculation of the TSR in the latter case, but Counsel has.
The corresponding figures for 2018-19 are my £4,225/£5,850 versus HMRC £1,861/£6,086 for the two different dividend figures.
Now you might conclude from this: pay the £40,000 dividend and take advantage of the lower (incorrect) HMRC figures. But if you do that you should tell the client to expect HMRC eventually to correct the tax to my figures when they finally catch up!
My free TSR checker will be online later this week.
24th Apr 2018
The 2017-18 HMRC calculator is copied by most of the tax return software developers. Unfortunately the HMRC calculator appears to have a number of errors similar to (but different from) the errors that plagued the 2016-17 calculator.
Try the following in your own software and post the results:
Example 1 Salary £11,000, Interest £7,000 Dividends £16,000. Correct tax is £925.00. HMRC make it £987.50.
Example 2 Salary £50,000, Sole trade profit £12,000. The tax is right but the Class 2 should be £88.35 and the Class 4 £76.72. HMRC make it Class 2 £0 and Class 4 £76.72.
Example 3 Salary £10,000, dividends £8,000, UK chargeable event gain £10,000. Correct tax is £1,725 less £1,200 = £525. HMRC make it £2,000 less £2,000 = Nil
24th Apr 2018
My bad! I transposed two of my examples, Example 1 should have read Salary £11,000, interest £7,000, dividends £16,000.