PTAX FA2016 exam Question 6

Hi
I am looking at the practice exam for calculating income tax, dos anyone know why they have not taken off the PA in the answer?

Many thanks

Comments

  • BertieBertie West Midlands Registered Posts: 224
    What's the question? Is income above £122,000 by any chance?
  • jodyewhitejodyewhite AAT Student Posts: 11
    Hi bertie
    The employment income is £105,500 and self employment profits are £66,000.
  • BertieBertie West Midlands Registered Posts: 224
    edited March 19
    Ok.

    Total income over £100,000 starts to affect the personal allowance.

    For every £1 over £100k you'll lose 50p of the allowance. Once you hit £122k there is no allowance.

    Gross Gift Aid and Personal pension contributions can lower the total income for adjusted net income purposes. Thus possibly bringing client under £122,000.
  • jodyewhitejodyewhite AAT Student Posts: 11
    Hi Bertie
    Many Thanks I forgot about £122k wiping out the allowance, remember the other bit.

    Thanks again
  • BertieBertie West Midlands Registered Posts: 224
    edited March 20
    Just remember for every X over £100k you'll lose half the PA for it - PA is lost at £122k unless you can adjust net income.

    Next year the limit will be slightly higher.
    As you can see the 22k is double the current PA.
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