PTC June 08 Exam

cs_1988
cs_1988 Registered Posts: 231 Dedicated contributor 🦉
in AAT Level 4 (Level 8 in Scotland)
Having a slight issue.......

Why doesnt the pension bruce (Section 1) pays at 195 net after he is made redundant not do anything.

It's obviously been put there to confuse people, and its worked on me!!

Would really appreciate someones help.

Thanks
Chris

Comments

  • Big Bird
    Big Bird Registered Posts: 62 Regular contributor ⭐
    The only thing that you need to do for Payments to Private pensions is to extend the tax band by amount of pension paid = 195 x 3months = 585
    Then you need to gross it up 585 x100/78 = 750.00

    You can then extend the tax band by 750.00 ( Therfore band extended to 35385 before you start to pay tax at 40%) but if you do not pay tax at the higher rate of 40% which in this case Bruce does'nt then the extended band will have no benefit.

    Hope this helps
  • cs_1988
    cs_1988 Registered Posts: 231 Dedicated contributor 🦉
    Yes, makes perfect sense. Thanks for that.

    And with employer pensions and subscriptions you deducted from the Non savings income dont you?

    Thanks again
    Chris
  • Big Bird
    Big Bird Registered Posts: 62 Regular contributor ⭐
    Thats right you deduct the employees contribution to the pension scheme from your pay, but no need to to anything with the employers contribution if they make any.

Categories

Privacy Policy