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I was watching your lecture on Gift Aid in the 2nd Chapter.
For Ex 13 & 14, I am really confused why you did not apply the Adjust Net Income after deducting the Gift Aid gross amount, in order to calculate the tax liabilities.
For Ex 13, you totally avoided it. For Ex 14, you calculated and abandoned it for further calculation.
No where in your notes in the 2nd chapter have you stated such conditions for Adjusted Net Income.
All I have learned is that if there is gift aid or pension scheme, then you don’t calculate tax liability using net income but first adjust the net income then do it, within the notes so far.
Also note : it is 12570 PA and 37700 Basic rate. In the lectures using the old rates is making us memorize the wrong numbers until realize by tallying with the notes.
Appreciate your classes sir !
Ok, I tried to revise your lecture and I found a particular minute I might have not focused in upon, and whose information was not available in the Notes. So the following is the reason you did not implement ANI, please confirm if I got it right:
The Adjusted net income is not a figure that is included on the income tax computation. From the Income tax computation you take the NET INCOME that is unaffected by these (gift aid,etc) payments. In a separate working, you then compute Adjusted Net Income in order to help avoid any RESTRICTIONS in the Personal Allowance. So if there are no restrictions found (i.e. Amt < £100,000) no need to calculate ANI. If ANI will not affect the restrictions of PA because NI is very high, and thus regardless of ANI, the PA will result to NIL, then the NI will remain the same, as the ANI was just used to affect the PA and has no concern with the NI.
The calculation of adjusted net income is as shown in both the notes – sections 4 & 6 – and the lectures, a working to be computed if net income exceeds £100,000, the purpose of which is indeed to determine the level of PA, if any, that will be available to the taxpayer