Personal Tax- Notional tax from Chargeable Event gain shows as Refund?

Article ID

ias-12875

Article Name

Created Date

22nd August 2018

Product

IRIS Personal Tax

Problem

IRIS Personal Tax: Notional tax from Chargeable Event gain shows as Refund?

Resolution

This is a HMRC rule applied- First the notional tax reduces the tax to 0 , then ANY the tax deducted at source (if any)- thus it can give a refund back to client. The Notional tax is not creating a refund but it is the tax deducted at source after the notional tax has been applied that is creating this ‘refund’.

HMRC have an order for how things should be deducted regarding reliefs and allowances in terms of the tax due; Notional Tax and Top slicing relief is deducted before the tax deducted at source.
Also IF the Tax Due is higher than the notional tax the full amount is deducted from the Tax Due and then the Tax deducted at source is deducted, which is then causing the refund.

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