Personal Tax task 2

samilou1967

Please can someone help with this question as it is driving me nuts . Rowena is given a loan on 1/11/11 for £15000 for which she paid 1% interest. On 1/7/14 she repaid £3000 but made no other payments. HMRC 3.25% answer is £304
Thanks

wabisabi

Hi
At the start of the tax year she owed 15000 and at the end of the year 12000.

In this kind of situation you can use an average loan over the year:

((15000 + 12000) / 2) * (3.25% - 1%) = 303.75

samilou1967

Thank you, that makes sense now