# Practice assesment 2 1.4

Registered Posts: 2
Hello.
I am convinced the answer to this question is wrong. Could anyone confirm or advise where I am going wrong?

This is personal tax practice assesment 2 1.4 (b)

So Bobby is a higher rate tax payer therefore entitled to £500 savings allowance @ 0%

So the remaining 3700 @ 40% would be £1,480 however the official answer on the AAT website is £1,080

Am I missing something obvious here?

Thanks.

• Registered, Tutor Posts: 225
£47,500 (employment) - £12,500 (PA) = £35,000
This leaves £2,500 basic rate band

£4,200 savings:
£500 allowance
leaves £2,000 @ 20% = £400
remaining £1,700 @ 40% = £680

400 + 680 = £1,080
• Registered Posts: 2
Thank you very much!
All clear now.
• Registered, Tutor Posts: 225
You're welcome
• Registered, AAT Student Posts: 1
@PeterC Slightly confused by this, there's £2,500 left on the basic rate band, so my thought's would be;

£4,200 less 500 (savings allowance) which leave's 3,700 to be taxed. £2,500 @ 20% & £1,200 @ 40%

In this question do we take the savings allowance off the basic band to bring it down to £37,000?

I can't remember ever taking the saving's allowance off the basic band in previous questions
• Registered, Tutor Posts: 225
The savings allowance (and the dividend allowance) use up whatever tax band they are in. There is an example of this, for dividends, at SAIM1110 https://gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim1110