Personal tax

Just sat the tax exam today and as the question involved employment and savings/dividends income of well over £100k I needed to do a net adjusted income to recalculate the personal allowance. I deducted the company pension contributions from gross employment income first, then added on the grossed up savings and dividend income, but wasn't sure if I should deduct the £170 subscription (paid by the taxpayer and not reimbursed by the employer) to further reduce the income before deducting the £100k limit and then calculating how much of the personal allowance was preserved. Can anyone help?
john250155

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Answers

  • PeterC
    PeterC Registered, Tutor Posts: 230
    Yes you should deduct the subscription. I am assuming it is a relevant professional subscription. Taxable income from employment is the figure after allowable deductions.
    britvic72
  • britvic72
    britvic72 Registered Posts: 11
    Yes I'm pretty certain it was a relevant professional subscription. Upon discussion after the exam, one of the other students did not deduct the subscription before deducting the £100k and calculating the reduced personal allowance, but instead deducted it after she had deducted the reduced personal allowance. Therefore my personal allowance would have been £85 higher than hers as my income calculation had been reduced by £170 more than hers. Hope that makes sense.
  • britvic72
    britvic72 Registered Posts: 11
    Thanks Peter. I wasn't sure if I had done it right so feel better about it now :)
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