AAT - Personal Tax Practice assessment 1 - Questions 8b 8C

VijiVijins
VijiVijins Registered, AAT Student Posts: 9
Hi guys, could someone help me with the below please?

Question 8b

Ruby has total income of £105,000 for 2020/21. She wants to pay into a private pension scheme so that she protects her full
personal allowances of £12,500. She therefore needs to pay at least [answer] into a private pension scheme.

I thought the answer is £5000 (£105000-£5000-£100000)x0.5 but I checked the answers sheet and the correct answer is £4000 and I dont see why

Question 8c

Yong, a higher rate taxpayer, was provided with a company car for the whole of 2020/21. The car was registered on 21 March 2020. The cost of the car used in the benefit in kind computation was £31,500. It has a petrol engine and taxable benefit in kind for 2020/2021 is £5670.

If the car had been registered and received by Yong. on 10 April 2020, he would save [answer] in income tax
The correct answer is 252. Anyone knows how to do the calculation?

Cheers!

Comments

  • PeterC
    PeterC Registered, Tutor Posts: 225
    8b
    She needs to add £5,000 to her pension scheme but makes a cash payment of the amount net of tax, £4,000, and the pension company claims the £1,000 tax from HMRC.

    8c
    There are different rules for cars registered after 6th April 2020.
    Under the old rules the rate applied was 18% (5670/31500)
    This means that the emissions were 65-69 g/km
    For cars like this, registered after 6/4/20, the rate is 16%, giving a saving of £252
  • VijiVijins
    VijiVijins Registered, AAT Student Posts: 9
    PeterC said:

    8b
    She needs to add £5,000 to her pension scheme but makes a cash payment of the amount net of tax, £4,000, and the pension company claims the £1,000 tax from HMRC.

    8c
    There are different rules for cars registered after 6th April 2020.
    Under the old rules the rate applied was 18% (5670/31500)
    This means that the emissions were 65-69 g/km
    For cars like this, registered after 6/4/20, the rate is 16%, giving a saving of £252

    That's great, thanks very much Peter!

    But how exactly we do get 252 in 8c? 31500 * 18% = 5670, 31500 * 16% = 5040
  • Pian32
    Pian32 MAAT Posts: 448
    There's another step to the calculation.

    5670-5040 = 630 (less)

    Higher rate so tax at 40%

    630 * 0.4 = 252
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  • VijiVijins
    VijiVijins Registered, AAT Student Posts: 9
    Pian32 said:

    There's another step to the calculation.

    5670-5040 = 630 (less)

    Higher rate so tax at 40%

    630 * 0.4 = 252

    Great, thanks very much!
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