Stupid question about Tax bands...
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Oops, my bad sorry!
At least you got away from the dark side of audit
I don't get to do much tax technical work any moreTransfer Pricing is all just "it depends" and business methodology rather than technical.
I only ever joined audit with the intent to get into tax as soon as possible, was a foot in the door
Saw a very impressive piece of transfer pricing recently, very large global company had managed to get their effective worldwide tax rate down to about 3%.
Hehe I'm a lowly AAT and happy doing bookkeeping and basic accounts for now
. Iirc it can take around 10 years plus to get through ACCA/CIMA then CTA, if your good enough to get on a CTA course.Hehe I'm a lowly AAT and happy doing bookkeeping and basic accounts for now
Only if you're made to go really slow at doing them. ACCA should be around 3 years, CTA can be done in 1 especially with the exemption (I think) you get from the final CTA exam.
Edit: Although I would add that my knowledge is from practice not industry so may be entirely different there!
Impressive in that they managed to convince any tax authority that all of the functions, assets and risks were performed by the low tax jurisdiction! Some serious tax planning and losses shuffling going on there!
Tis all about the arm's length range
Impressive in that they managed to convince any tax authority that all of the functions, assets and risks were performed by the low tax jurisdiction! Some serious tax planning and losses shuffling going on there!
Tis all about the arm's length range
It was an elegant implementation. Entirely depends on the company doing what their transfer pricing policy states but that's their fault.
TAX is a PITA. I get no free allowance at the start of the tax year, due to the company car, and we don't qualify (that i can see) for any tax relief for having a baby or being married (maybe people here can make a suggestion/offer help?)
I appreciate that moaning about paying too much tax (as a result of earning a decent wage) is a little like moaning that your ice cream is too cold, it still boils my brain how much goes out each month.
I appreciate that moaning about paying too much tax (as a result of earning a decent wage) is a little like moaning that your ice cream is too cold, it still boils my brain how much goes out each month.
yeah, I pay 6% pension, and my car is hardly that uneconomical (typically get low 40s). Just a whinge is all, as i say its a lame thing to moan about, and I'm here nursing a 4 day old baby with a cold - so pretty tired/frazzled!
The car issue is actually an interesting one - i pay to tax to cover private fuel, as well as car tax - and i'd love clarification on something from the experts in here -
Genuine question if you could help answer it?
The benefit of my car & fuel (£11,700 p.a.) which transpires to cost me in tax approx £2400 p.a (20% band) £4700 (40% band).
If i finished last year in the 40% bracket, do i pay 40% on the fuel & car for all of the next year, or do i pay 20% until i earn the threshold for 40%, at which point start paying the 40% to the end of the year?
TIA
The car issue is actually an interesting one - i pay to tax to cover private fuel, as well as car tax - and i'd love clarification on something from the experts in here -
Genuine question if you could help answer it?
The benefit of my car & fuel (£11,700 p.a.) which transpires to cost me in tax approx £2400 p.a (20% band) £4700 (40% band).
If i finished last year in the 40% bracket, do i pay 40% on the fuel & car for all of the next year, or do i pay 20% until i earn the threshold for 40%, at which point start paying the 40% to the end of the year?
TIA
To anyone with half a brain more like... It's incredibly simple, and something that any tax payer should know (heck I'm not a tax payer and I know)
Aside for that, I agree with jimjam, a simple google would have answered his question, starting a thread on it is just idle-ness.
The taxable benefit of the car and fuel is essentially treated as extra income. and is taxed as such.
So, with personal allowance being £7475, and the basic rate band (20% ) being £35k, you can have 'earnings' of £42,475 before paying anything at the higher rate of 40%.
So, if your earnings (not including the car/fuel) are above that, yor car and fuel will effectively be costing you their beneift figure x 40%.
But, if your earning without the car/fuel are for instance, £40k exactly, £2475 of the car/fuel benefit will be taxed at 20%, and the remainder at 40%.
Just treat the taxable benefit figure of £11,700 as extra income when calculating your tax.
The eficiency of the car means nothing. It's calculated on the cost of the car, and a percentage based on the CO2 emissions. The fuel benefit is also based on the emissions of the car. It looks like quite a high figure to me, so I would gess you have either an expensive car, or an old car with high co2 emissions.
cheers guys.
I do indeed have a K code.
The car is high because i have private fuel as well. Its nothing special, emissions of about 150, and cost of about £30k.
That makes perfect sense! THe figures i used were pulled from the HM site, with the two numbers:
So i assumed i paid (per month) the tax liability indicator value shown above (for 20% or 40%) divided by 12? (the bottomset of numbers)
Am i wrong? And the benefit (top numbers) comes out of my free allowance, and leaves me a -£4k tax free amount? (which by definition means i'm in the red?)
I do indeed have a K code.
The car is high because i have private fuel as well. Its nothing special, emissions of about 150, and cost of about £30k.
That makes perfect sense! THe figures i used were pulled from the HM site, with the two numbers:
So i assumed i paid (per month) the tax liability indicator value shown above (for 20% or 40%) divided by 12? (the bottomset of numbers)
Am i wrong? And the benefit (top numbers) comes out of my free allowance, and leaves me a -£4k tax free amount? (which by definition means i'm in the red?)
Yes you have a negative personal allowance.
The tax you pay per month depends on your other income and where that puts you in the band. It's possible it makes you straddle the band so you may effectively pay part of the benefit at 20% and part at 40%. The figures HMRC give are examples of the benefit being totally one or t'other.
Personally I prefer my way of looking at it
Quick final ?
This is really my original question. For the first few months of the financial year my earnings will obviously be below the 40% threshold (despite my gross previously being over). So do i pay 20% on those months, then increase when i hit the threshold?
I agree though, yours makes more sense!
This is really my original question. For the first few months of the financial year my earnings will obviously be below the 40% threshold (despite my gross previously being over). So do i pay 20% on those months, then increase when i hit the threshold?
I agree though, yours makes more sense!
No - the personal allowance is never negative. It can be 0, (or any amoutn up to 7475, and then there is the additional age related amounts for those over 65) but never negative. To be clear, you have the personal allowance. There are then other allowances and deductions in your code, which leave the net allowances, which can be any amount, positive, or negative. Maybe a bit pedantic, but nevertheless, correct, and it's always worth being correct when talking tax.
The tax you pay per month depends on your other income and where that puts you in the band. It's possible it makes you straddle the band so you may effectively pay part of the benefit at 20% and part at 40%. The figures HMRC give are examples of the benefit being totally one or t'other.
Personally I prefer my way of looking at it
I prefer mine
The way Pudney explained it is probably the best approach for figuring out what effect it will have on your month to month pay. The way I explained it is more from the approach of calculating your overall liability for the year.
Both will come to the same result.