Help please- SA/order of taxation/multiple incomes..

[Pssst]

Hi all,

I'm just trying to fill in my SA for the first time. First thing is, i read somewhere that order of taxation can affect how much tax you pay? I wonder if the HMRC SA calc uses the most tax efficient means?

I have PAYE income
Divi income
interest income
I also made a contribution to a SIPP

If i wanted to calculate this lot myself to cross check it, how do i do it?

I could supply some figures??

Thanks

[robbob]

Yes - "generally" hmrc uses the most efficient route other than the 90 situations where they got their sums wrong this year (5/4/18), if you are covered by one of those situations its normally a paper return or wait till after the filing deadline in the hope hmrc will back check the calcs.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/707897/2017-18-exc-indi-v1.pdf

Note there are situations where manual intervention will still be needed to get the correct tax due - eg if you have foreign tax credits that you can partly use to reduce your final tax bill. HMRC doesn't flag up automatically what you can claim foreign tax credit wise.

If i wanted to calculate this lot myself to cross check it, how do i do it?

It's pretty difficult to know if the hmrc solution is wrong unless you know the correct answer yourself. You should be able to follow the basic logic of how hmrc calculates the figures though for a particular circumstances 95%+ of the time its pretty standard - set paye income against personal allowance - then interest income not covered by savings allowance and dividend income will normally be top slice. It can get pretty sketchy around the higher rate threshold though with those combos of income.