Income tax computation – Deductions from Total Income

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1. sifiso says

   January 19, 2018 at 5:19 am

   Hi. Many thanks for the informative and wonderful lectures. Just a short question. In eg 13 of the notes, the gift donation was not deducted from the total taxable income. In eg 14 and 15, the donation was deducted to give us Adjusted Net Income and, is then added to Basic and Higher Rate limits when calculating Tax. Is that how it’s done? I do find it a little difficult to understand the concept purely from a theoretical point of view. The examples make it easier. Many thanks for your kind response.

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   • umernaru says

     January 30, 2018 at 7:13 pm

     Hi Sifiso,

     I am studying this course too at present. What I understood is that we deduct gift aid from taxable income in order to get adjusted taxable income. This number is used to work out an adjusted personal allowance for people on incomes more than 100000. In example 13 personal allowance is 11000 because the individual is not earning more than 100k. In other two examples they are and this calculation becomes necessary. Hope that helped.
     Umer

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2. hariramesh says

   June 7, 2017 at 7:30 am

   If simply it is mentioned as donation instead of donation under gift aid scheme will the above process apply???

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3. npunancy says

   June 2, 2017 at 4:16 pm

   Is the tax liability for Thomas 56,000 pounds the answer to example 14?

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   • bhomaram says

     August 16, 2017 at 11:33 am

     Ma ans is 56100

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4. Isaac says

   August 9, 2016 at 9:41 pm

   Gift aid payment is treated as being paid net of basic rate of tax (20%). Please refer to your lecture note Chapter 2 page 13 before you continue reading.

   To that effect, to obtain the gross amount paid to the charity , a grossing exercise of 100/80 is required.

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