help with personal tax question
ann09
Registered Posts: 17 Dedicated contributor 🦉
can somebody explain me how do we get the answer ?
its task 1.9 from personal tax exam fa10
ted received 3000 gross back interent for 2010/11
employment net imcome of personal allowances tax payable on interest
Nil 365
1500 506
10000 600
35000 720
its task 1.9 from personal tax exam fa10
ted received 3000 gross back interent for 2010/11
employment net imcome of personal allowances tax payable on interest
Nil 365
1500 506
10000 600
35000 720
0
Comments

It took me a while to get my head around how they are asking it.
Nil  There is £2420 (or there about) at the savings rate of 10% and the remainder of the interest at 20%
1500  Again there is a little bit of low savers 10% band to use up and remainder at 20%
100000  obviously all the personal allowance is used up so all at 20%
35000  Bit of the interest will sneak into higher rate of tax so most at 20% but a bit at 40%0 
ted received 3000 gross back interent for 2010/11
employment net imcome of personal allowances tax payable on interest
Nil 365
1500 506
10000 600
35000 720
So the one at Nil is presuming his employment income is £6475 (using all of his personal allowance) therefore £2440 of savings will be at 10% = £244 and the other £560 os savings income will be at 20% = £112, added =£356 * you have a typo.
The second one presumes his income has gone over his tax free allowance by £1500  so you'll have to do £2440  £1500 to see how much of that starting band is left of the savings = £940, so £940 of the savings income is at 10% = 94 the other £2060 is at 20% = £412... £412 + 94 = £506
The 3rd one is simply there is no starting savings band rate and because his income is nowhere near going over the basic rate allowance of £37400 it is just £3000 x 20% = £600
The 4th one is saying his income is £35000 and because the basic rate allowance is only upto £37400 he only has £2400 left at the basic rate so £2400 of his savings income will be at 20% = £480 however the other £600 of his savings income will be at higher rate of 40% so 600 x 40% = £240.... 240 + 480 = £720
Hope that helps0 
Thanks alot clegganator and luby , you guys are star :thumbup1:0

I hated this question and like clegganator it took me ages to understand it x0

Employment net of personal allowances? What a mouthful! That said, I can't think of another way to put it...0
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