F
Frank X
I decided to have a look at these calculations. It can't be difficult I
thought ;o)
Each tax (PAYE, NIC, Employers NIC) has rates and has bands that the rate
applies to in a linear fashioned, PAYE also has a personal allowance before
tax is applied, for genericity say the NIC have 0 allowance.
So I naively think :
generic calculation for total tax in each band is
portion of Year = weekNo/ 52 (or monthNo / 12)
low = lower limit of band * portion of Year
high = higher limit of band * portion of Year
allowance = Personal allowance * portion of Year
tax in band = min( max((pay to date - allowance - low),0) , high - low) *
rate.
Sum up the bands for each tax and round to pence as the end. (up , down,
normal or even banking conventions)
Ok the anal may want to round intermediate results ( but this is unnecessary
as the portion of year is in weeks or months, e.g. no probs with computer
precision).
So I read http://www.inlandrevenue.gov.uk/ebu/payerout10.pdf.
It appears that the revenue have decided that rather than use a clean and
simple generic algorithm (as is allowed for NIC) PAYE calculations should be
far more complex to match results given by looking up tables.
Why would they do this?
To my unprofessional eye it appears that they should have been drowned at
birth.
Even if it was important to exactly match the results from tax tables does
anybody still use them in the age of the free spreadsheet?
thought ;o)
Each tax (PAYE, NIC, Employers NIC) has rates and has bands that the rate
applies to in a linear fashioned, PAYE also has a personal allowance before
tax is applied, for genericity say the NIC have 0 allowance.
So I naively think :
generic calculation for total tax in each band is
portion of Year = weekNo/ 52 (or monthNo / 12)
low = lower limit of band * portion of Year
high = higher limit of band * portion of Year
allowance = Personal allowance * portion of Year
tax in band = min( max((pay to date - allowance - low),0) , high - low) *
rate.
Sum up the bands for each tax and round to pence as the end. (up , down,
normal or even banking conventions)
Ok the anal may want to round intermediate results ( but this is unnecessary
as the portion of year is in weeks or months, e.g. no probs with computer
precision).
So I read http://www.inlandrevenue.gov.uk/ebu/payerout10.pdf.
It appears that the revenue have decided that rather than use a clean and
simple generic algorithm (as is allowed for NIC) PAYE calculations should be
far more complex to match results given by looking up tables.
Why would they do this?
To my unprofessional eye it appears that they should have been drowned at
birth.
Even if it was important to exactly match the results from tax tables does
anybody still use them in the age of the free spreadsheet?