ACCA TX-UK FA2025 Chapter 2 The Income Tax Computation

4 Comments

1. J
   Jo_268·18d ago

   I don't follow on how you arrived at the 12000 for daisy and the 1000 for the dividends
2. J
   Jo·13d ago

   I assume you are referring to example 5? PAYE was 19,500 less PA 12570 = 6930 @ 20%=1386 Then she also had bank deposit of £10,000 If you add the gross salary plus the bank deposit of 10k the total brings you to 29,500 which is within the basic tax rate band, therefore she is entitled to nil rate band of £1000 (this is available on savings income to all whom are basic tax payers, if you are higher tax payer then this allowance reduces to £500 and £0 for additional tax payers) so savings income is £10000 less the £1000 leaves us with £9000 to pay tax on @ 20% = 1800 then we have the dividends she received £1000 but we know from rules all are entitled to £500 at 0% dividends band that means she must pay tax on the remaining £500 @20% =100
   The total tax payable from my calculations is:
   PAYE =1386
   Savings = 1800
   Div.=100
   Total= 3286
   Less: tax paid through PAYE (1400)
   Total Tax payable= 1886
3. J
   Jo·13d ago

   Apologies I gave the wrong % for dividends in fact should be 8.75% for the basic rate threshold. so that will make £500*8.75%=43.75 Total tax payable 1829.75
4. J
   Jo_268·18d ago

   How did we get the 9000