ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 17, 2017 15:58:48 GMT
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Mar 17, 2017 16:16:35 GMT
Anyone know an online free tax calculator that includes both income & savings tax into the calcs?
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stevio
Member of DD Central
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Post by stevio on Mar 17, 2017 16:46:44 GMT
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Post by bracknellboy on Mar 17, 2017 17:34:32 GMT
So much for a simplified tax system..........
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hazellend
Member of DD Central
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Post by hazellend on Mar 17, 2017 17:52:26 GMT
See you all back here March 2018!
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hazellend
Member of DD Central
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Post by hazellend on Mar 17, 2017 17:59:11 GMT
Doesn't seem to calculate the savings income tax correctly for the 17k
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dzo
Member of DD Central
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Post by dzo on Mar 17, 2017 18:53:24 GMT
I'm a highest rate payer so can't make any more pension contributions as I've already come up against my tapered pension allowance. 17k tax free is unbelievable. I'd need to earn 38k through blood, sweat and toil to get that net, and it would obliterate my pension annual allowance. It sure is easier making money from investments than from working. Indeed. In the UK, income is taxed quite heavily compared to wealth/investment income. I know we're all here to earn investment income, but really it should be the other way around. If I was in the same position as hazellend I'd just retire and the economy would lose a productive worker.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,333
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Post by ilmoro on Mar 17, 2017 19:12:12 GMT
hazellend - I think you are on the right lines, but have perhaps expressed your logic in terms that differ slightly from how the calcs are done which may confuse some people. When you do the self assessment you enter the gross income for everything. So on £8k gross earnt income + £17k p2p the actual gross income is £25k less allowances of £17k (given earnt income is less than personal allowance) , and hence tax will be due on £8k @ 20% = £1600 which you will have to pay to HMRC.
You can pay into the SIPP upto the value of the gross earnt income BUT net of basic rate tax, so you would pay in £6400 and the SIPP provider will reclaim the £1600 from HMRC. (I'm not an accountant, but have done self assement forms for 15 plus years, and am currently in a similiar position to what you describe - small earnings, large p2p income. That said I'm below the £5k dividend limit so have no first hand experience of any affect that might have on the wider calcs). I was under the impression that if your total income was above £16,000 (not £17000) you would lose the £5000 starting rate, so in the highlighted example above income of £25000 would mean only £12000 was tax free and tax would be due on £13000 @20% =£2600 to pay to HMRC. Pension contributions do not reduce your taxable income as far as the starting rate allowance in concerned. Income for starting rate is 'non-savings' income so any interest doesnt count to the £17k
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stevio
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Post by stevio on Mar 17, 2017 19:12:36 GMT
Doesn't seem to calculate the savings income tax correctly for the 17k Seems to work
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hazellend
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Post by hazellend on Mar 17, 2017 19:21:49 GMT
Indeed. In the UK, income is taxed quite heavily compared to wealth/investment income. I know we're all here to earn investment income, but really it should be the other way around. If I was in the same position as hazellend I'd just retire and the economy would lose a productive worker. I'm 38 but an avid follower of MMM
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fasty
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Post by fasty on Mar 17, 2017 19:39:55 GMT
Hmm having though this through, I quickly realise that the only way I could make this work for me is to get married  |
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hazellend
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Post by hazellend on Mar 17, 2017 19:56:40 GMT
Hmm having though this through, I quickly realise that the only way I could make this work for me is to get married or have a non married partner who you can completely trust.
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hazellend
Member of DD Central
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Post by hazellend on Mar 17, 2017 20:04:21 GMT
Doesn't seem to calculate the savings income tax correctly for the 17k Seems to work Yes I was wrong and it was right after looking at it a bit more
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stevio
Member of DD Central
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Post by stevio on Mar 17, 2017 20:28:48 GMT
I know we're all here to earn investment income, but really it should be the other way around. If I was in the same position as hazellend I'd just retire and the economy would lose a productive worker. I'm 38 but an avid follower of MMM MMM?
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hazellend
Member of DD Central
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Post by hazellend on Mar 17, 2017 20:32:37 GMT
I'm 38 but an avid follower of MMM MMM? Mr Money Mustache lol
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