Practice Personal Tax Exam Question Help Please

jameshayward2005
jameshayward2005 Registered Posts: 2
in AAT Level 4 (Level 8 in Scotland)
Hi

Is anyone able to help me with the following question please, I cant see how the personal allowance is calculated:

Kayla who is 47 provides you with the following information that relates to her income for 13/14

Her annual salary from 1 January 2013 was £105,800 on 1st January 2014 she received a 2% pay rise

She has the use of a company car on which the benefit in kind has been computed at £3,350. The company pays for all running costs including the fuel and this benefit in kind has been computed at £4,190

She paid an annual subscription to her professional body costing £290

Kayla is in the company pension scheme. She pays 6% of her annual salary into this scheme and her employer pays 8% of her annual salary

During 13/14 kayla received £1,080 in interest from a building society account and £380 in interest from an isa

The personal allowance on the answer is £5166, I know you divide any amount over £100,000 by 2 and minus from £9440 and minus grossed up pension contributions from the original figure but I cant get it back to the answer.

Many Thanks

James

Comments

  • CeeJaySix
    CeeJaySix Registered Posts: 645
    You need to work out total income:

    Salary - 105,800 + (105,800 x 0.02 (2% payrise) x 3/12 (payrise from Jan - March) = 106,329

    Benefits - 3,350 + 4,190 = 7,540

    Interest - 1,080 x 100/80 = 1,350 (gross up as interest is received net; ISA is exempt)

    Less professional fees = (290)

    Less pension deductions - 106,329 x 0.06 (gross as paid pre-tax from salary) = (6,380)

    Total 108,549

    Half of the excess over 100,000 - 8,549 / 2 = 4,274

    9,440 - 4,274 = 5,166

Categories

Privacy Policy