Dividend Tax Credit in Inland Revenue Tax Calculation Guide

I have just been trying to calculate my tax return by filling in the IR
Tax Calculation Guide. This is the first time, I have not had to pay
higher rate tax, so I longer have to pay extra tax on Dividends.

However, the paper calculation guide appears not to calculate the tax
due correctly. It appears to ignore the tax credit on the dividend
payments. If I try adding =A3900 to the dividends paid and adding =A3100
to the Tax credits, it claims that I need to pay another =A3100 tax.

Surely there should be no extra net payment due? If this is the case,
then everyone using the guide to calculate their own return will be
overpaying tax (and this appears likely to be true of previous years)?

Dick

Re: Dividend Tax Credit in Inland Revenue Tax Calculation Guide

wrote:
> I have just been trying to calculate my tax return by filling in the IR
> Tax Calculation Guide. This is the first time,

Surely, wouldn't it be a lot easier to file the Return online. That way
the "tax calculation engine" built into the HMRC software will do the
calculation for you.

Also, if you insist upon using a paper return, if you are going to file
it in the near future you can answer Q18 so as to get HMRC to do the
calculation.

Your problem? Suspect you have missed carrying forward one of the figures.

Re: Dividend Tax Credit in Inland Revenue Tax Calculation Guide

Hi John

I would love to do it on-line, but the IR software does not support all
the supplementary pages that I have to return. In past years I have let
the IR do the calculations, which I think are correct.

The problem appears to be that Box 10.17 from the Tax Return form is
used to calculate tax due, but neither box 10.15 or 10.16 are used by
the Tax Calculation Guide. I would expect in Step 4, Page 9, that the
value in box 10.16 should be added into the UK Savings and Investments
box.

I have transcribed the guide to a spreadsheet to try to ensure that I
don't make mistakes and have rechecked the spreadsheet against the
guide several times, but cannot find an error in the transcription.

As I said originally, if this really is a mistake in the guide, then
anyone else who has used the guide and has Tax credits will have
overpaid tax.

Dick

Re: Dividend Tax Credit in Inland Revenue Tax Calculation Guide

On 30 May 2006 10:39:54 -0700, wrote:

>I have just been trying to calculate my tax return by filling in the IR
>Tax Calculation Guide. This is the first time, I have not had to pay
>higher rate tax, so I longer have to pay extra tax on Dividends.
>
>However, the paper calculation guide appears not to calculate the tax
>due correctly. It appears to ignore the tax credit on the dividend
>payments. If I try adding £900 to the dividends paid and adding £100
>to the Tax credits, it claims that I need to pay another £100 tax.
>
>Surely there should be no extra net payment due? If this is the case,
>then everyone using the guide to calculate their own return will be
>overpaying tax (and this appears likely to be true of previous years)?
>
>Dick

What makes you say you don't have to pay higher rate tax?

--
Peter Saxton from London