Re: The order of taxable income for Directors?

On Sat, 8 Jul 2006 14:53:41 +0100, "Tim" <me@xxxxxxx> wrote:

Peter Saxton wrote:
There's no order. Why should there need to be an order?

...
"Peter Saxton" wrote
Are you saying the total tax is different
depending on some order you put them in?

"Tim" wrote:
Of course that's true.
It's actually very worrying if an accountant can't see that...

"Peter Saxton" wrote
I see reality rather than what people think is right.

The only order is non-savings income, savings income and dividends.

Aha! - Now you've changed your mind!
ORIGINALLY: Peter Saxton wrote: "There's no order.
Why should there need to be an order?"
!

If there is an order what is the order? Does car benefit come before
or after salary? I agree you could discuss in very general terms
"order" but not how the OP was trying to use it. Broad categories are
very different to someone trying to work out what the tax on car
benefit is. The easiest way to work out this would be to work out the
tax on the income with and without the car benefit. This would still
not mean that the amount is specifically allocated to car benefit.

"Peter Saxton" wrote
You don't have each source of income put in order and then
allocate allowances and tax rates to each source of income...

No-one suggested that **every single** source has a specific
place in the order. Just that some items have to go before/after
others - which (as you have now realised) is quite true.

The OP was thinking that separate sources of income were put in order
- he thought that car benefit could be put before or after salary.
This is not true. I agree that people think that dividends usually
come at the top unless there's capital gains tax (and other more
unusual sources of income).

--
Peter Saxton from London
peter@xxxxxxxxxxxxxxxxx
.

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