PTC June 2006 exam- Please help

lucy1988

Hi,

Can anyone help me, i am doing task 1.4 on the June 2006 PTC exam and i cannot see why they are increasing the tax rate by 8050. I know this has something to do with gift aid and th pension. But why is only £7695 charged at 22% and £335 at 10%???

Please can someone help me as a i have my exam tomorrow morning and this has really confused me.

Thanks
Lucy

Fiorellino

lucy1988 wrote: »

Hi,

Can anyone help me, i am doing task 1.4 on the June 2006 PTC exam and i cannot see why they are increasing the tax rate by 8050. I know this has something to do with gift aid and th pension. But why is only £7695 charged at 22% and £335 at 10%???

Please can someone help me as a i have my exam tomorrow morning and this has really confused me.

Thanks
Lucy

Because £7695 is tax at basic rate before exceeding the higher tax band of £34600 and the rest of the gift and pension take the basic rate of the dividend.
Does it make sense?

po1988

BAre in mind that the answers on this site for PTC relate to different tax years, hence different Personal allowances etc.

lucy1988

Hi, thanks for getting back to me but no sorry it still doesnt make sense.

It says-

2090 x 10%
30310 x 22%
7695 x 22%
355 x 10%
2120-355 x 32.5%

So is the 22% band not already taken up by the salary?

Sorry i always get confused.

Thanks

Fiorellino

I can see that it is a different tax year, because the starting rate goes up to £2230 and not £2090
You are doing 2006??? dont bother it only will confuse you.