Esm receives dividends of 17,000 in 2017-18 and has no other income. She makes a gross deductibl

Esmé receives dividends of £17,000 in 2017-18 and has no other income. She makes a gross deductibl e payment of £10 0 during the year and claims only the basic personal allowance. Calculate Esmé's tax liability for the year:

(a) with the deductible payment

(b) as it would have been without the payment.
How would the situation differ if her dividend income had been £1,000 lower?

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Dividends received Less: Payment Net income Less: Personal allowance Taxable income Income tax 5,000 400 5,400 4,400 Tax liability 5,000 500 5,500 4,500 @ 0% @ 7.5% @ 0% Dividends 17,000 (a) 17,000 100 16,900 11,500 5,400 0.00 30.00 30.00 (b) 17,000 17,000 11,500 5,500 0.00 37.50 37.50 Dividends 16,000 (a) 16,000 100 15,900 11,500 4,400 0.00 0.00 (b) 16,000 16,000 11,500 4,500 0.00 0.00