Finance act 2019 – Example 4

Hi,

Can somebody help me with this question, i have calculate tax liability 9,000.

Non – Saving income

34,000 @ 20% = 6800

Saving income

500 @ 0 = 0

8000 @ 20% = 1600

1500 @ 40% = 600

Total = 9000

Please Check the below example and how they answer it
EXAMPLE 4
For the tax year 2019–20, Henri has a salary of £46,500 and savings income of £10,000. During the year, he made gross personal pension contributions of £4,000. His income tax liability is:
£
Employment income 46,500
Savings income
10,000
_______
56,500
Personal allowance
(12,500)
_______
Taxable income

44,000
_______
Income tax:

34,000 (46,500 – 12,500) at 20%
500 at 0%
3,000 (37,500 – 34,000 – 500) at 20%
4,000 at 20%
2,500 (10,000 – 500 – 7,000) at 40%

6,800
0
600
800
1,000
_______
Tax liability
9,200
_______
Henri is a higher rate taxpayer, so his savings income nil rate band is £500.
The savings income nil rate band of £500 counts towards the basic rate threshold of £37,500. This is then extended by £4,000.
Savings income can also benefit from the starting rate of 0%. However, the starting rate only applies where savings income falls within the first £5,000 of taxable income. If non-savings income exceeds £5,000, then the starting rate of 0% for savings does not apply.