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Please am needing help on why the examiner did not exclude personal allowance in this question. As ANI should be 0 if it’s over 122,000.
XAMPLE 2
For the tax year 2016–17, May has a trading profit of £159,000. During the year, May made net personal pension contributions of £32,000 and a net gift aid donation of £9,600. Her income tax liability is:Thank you
Adjusted net income is after deducting the gross amount of both gift aid payments and personal pension contributions – see chapter 2 section 3 on personal allowance and work example 15
In your example above gross gift aid and personal pension contributions amount to £52,000 so ANI is 107,000.
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