# Need help with Chapter 6 - How are people calculating what should be taxable

AAT Student Posts: 2
Hi I am due to sit my PTax exam in the next few days but am still really struggling with how to calculate what income should be taxable...

For example say you have £114,000 non savings income, £7,000 savings income and £16,000 dividend income. How would you go about calculating it? I seem to be doing it incorrectly and just need some tips on how to work it out correctly for the exam.

Thanks!

• West Midlands Registered Posts: 376
Just by looking at the numbers; are you taking account of the fact that there is no personal allowance as the total income is over £122,000? Assuming FA 2016.

• AAT Student Posts: 2
In all of the answers it looks like in this question they don't take account of personal allowance at all? Even when income is less than 122k.

Maybe i am reading it wrong but in this question we haven't been told to account for it. Maybe that is where i am going wrong. Yes it's FA 16!
• West Midlands Registered Posts: 376
Total income between £100,000 - £122,000 has an adverse affect on the personal allowance.

As a broad example; for every £2 over £100,000 the tax payer will lose £1 in allowance.

Total income £112,000
Limit (£100,000)
Excess £12,000

Personal allowance £11,000
Less (£12,000 X 0.5) (£6,000)
New PA £5,000

Therefore;

Total income £112,000
Less PA (£5000)
Taxable income £107,000

Adjusted net income can bring down total income, for the purposes of calculating the PA.

For instance

Total income £112,000
ANI £108,000.

Total income £112,000
Less PA (W) (£7000)
Taxable income £105,000

(W) PA £11,000
Total income £112,000