Version 23.2 Top Slicing Relief calculation — Support Bulletin 19/01/24
There are problems affecting some Top Slicing Relief calculations produced by HMRC and Digita Personal Tax.
These problems won't affect all Top Slicing Relief calculations. We recommend that you complete a Test in Live submission in advance of the 31 January filing deadline for those clients with Top Slicing Relief. This will allow time to identify and correct any errors.
If you get a CAL 1 error when attempting to file an SA100 with Top Slicing Relief, contact Customer Support.
Interaction of Top Slicing Relief, the Savings Rate Band, and Personal Savings Allowance
Following HMRC's review of the Top Slicing Relief calculation, it has confirmed that the Savings Rate Band (SRB) and Personal Savings Allowance (PSA) should be recalculated when calculating the tax liability on the sliced gain. The SRB and PSA should be allocated to savings income before any balance is allocated to Life Assurance Gains.
In some cases, Personal Tax may incorrectly allocate too much of the SRB and PSA to Life Assurance Gains when these should be utilised, fully or in part, by savings income.
Similarly, in some cases, HMRC's calculation is allocating the PSA to Life Assurance Gains without taking into account taxable savings. This is covered by HMRC's filing exclusion 140, and HMRC advises that a paper return should be filed in this case.
We’ll correct our Top Slicing Relief calculation in the next release of Personal Tax.