# Tax credits and USC.



## scan (2 Feb 2012)

My gross tax credits are £5,440.00.
My DSP pension is £19,957.60
My private pension is £21,00.00.
How much  tax will i pay
How much usc will i pay.
Is the usc  taking after the tax.
Thank you.


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## mandelbrot (2 Feb 2012)

What age are you?
Are you single/married/widowed?


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## scan (2 Feb 2012)

My age is 75 married,my wife is 64 home career all her married life 43 years.


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## mandelbrot (3 Feb 2012)

You can use a calculator like this one to check figures: http://www.taxcalc.eu/

Based on the figures you've given:

*Income Tax:*
Standard method:
Income 40,958
Notional tax @ 20% = 8,191.60
Less Tax credits = (5,440.00)
Tax payable = 2,751.60
Less Marginal relief (see below) = (768.40)
*Net tax payable = 1,983.20*

Marginal relief calculation:
Income = 40,958
Less Exemption = (36,000)
Income in excess of exemption = 4,958
Tax @ 40%: *1,983.20 - *this is the most you can owe in income tax. If the tax payable figure above exceeds this amount then you get marginal exemption relief to bring your tax payable figure down to this amount.

*USC:*
*(DSP payment is not liable to USC)*
First 10,036 @ 2% = 200.72
Remainder (21,000 - 10,036) = 10,964 @ 4% = 438.56
USC payable = 639.28


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## Leaky1 (3 Feb 2012)

Your credits of €5440 appear to be: married €3300 + age €490 + paye €1650.
Based on you incomes and being over 65 you are not below the exemption limit (€36,000). However it is more beneficial to give you marginal exemption relief. I would calculate the tax & USC as follows:

Tax of €1,982.80
USC of € 639.28
total: €2,622.08

USC calculation*:*
€10,036 @ 2%= €200.72
€10,964 @ 4%= €438.56
USC due= €639.28

Tax Calculation 1 (using tax credits):
€21000 + €19,957 = €40,957
€40,957 @ 20%= €8,191.40
less credits: €5,440.00
tax due= *€2,751.40*

or

Tax Calculation 2 (using exemption):
total income €40957 - exemption €36000= €4957
€4957 @ 40%= €1,982.80
net tax due= *€1,982.80* (the most beneficial of the 2 tax calculations)


_(apologies for the duplication, I must have statred writing this as Mandelbrot posted his.)_


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## roker (3 Feb 2012)

Can I ask a question on this thread? I assume the state pension is exempt from USC, will this also apply to UK state pension, I do not pay tax and I think I am paying too much USC on my Irish private pension of €4,959


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## Gervan (4 Feb 2012)

Yes, the UK state pension should be exempt from USC.


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## roker (8 Feb 2012)

Thanks Gervan: I rang the tax office because i was deducted USC January, I was told that I will not pay USC this year and that the tax credits had only gone to the pension providers this month


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## Black Sheep (9 Feb 2012)

I've heard of several others having usc deducted from small (under E10,000) pensions. It sounds to me that Revenue are deciding to deduct usc from all pensions and those who are exempt can claim back at the end of the year.

Perhaps not everyone is aware that they are exempt if their private pension is under 10,030


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## roker (9 Feb 2012)

Why deduct it if we have to claim it back? that's a free loan we are giving them


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## Black Sheep (10 Feb 2012)

That seems to be the idea, and perhaps the hope is that people won't claim it back. Bonus for them!!!!!!!


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## roker (12 Feb 2012)

I just got a new Credit cert. (only a week after phoning the tax office) It clearly states on this one that no USC is payable, where as the previous cert had USC calculations on it.


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## Black Sheep (13 Feb 2012)

I rest my case.


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