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Confused with some terms

Forums › ACCA Forums › ACCA TX Taxation Forums › Confused with some terms

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by imubin51.
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  • April 2, 2021 at 12:47 am #615716
    imubin51
    Participant
    • Topics: 2
    • Replies: 1
    • ☆

    Hello good people,
    I have been confused regarding these term time and again. Is there anyone who could clarify these? I would really appreciate if you could help me with the calculation steps as well.

    **Net Income
    **Adjusted Income
    **Net Adjusted Income

    Thank you.

    August 27, 2021 at 11:37 pm #633177
    cityfox
    Member
    • Topics: 5
    • Replies: 6
    • ☆

    Hi Imubin51,

    The two terms Net income and Net adjusted Income (ANI) are two terms related to the ordinary income tax calculation. The term Adjusted income belongs according to my current knowledge to the calculation of pensions and you would use it for the determination of the annual allowances. (Please someone correct me if I am wrong right now)

    Certainly for those two terms you would calculate the outcome in this way:

    All your income sources like

    Non savings income + Savings income + Dividend income = Total Profit – Trading Loss = Net income

    Net adjusted income is something you would determine in order to figure out if the person will be eligible for a Personal allowance and if so how much!

    Net Income – Personal pension contributions (Gross) – Gift aid contributions (Gross) = Net adjusted Income

    For a self employed person Adjusted income is usually simply Net income!
    Otherwise it would be Net income – (or + I am right now not 100% sure) Pension contributions.

    Hope this helps.

    August 29, 2021 at 11:08 am #633353
    imubin51
    Participant
    • Topics: 2
    • Replies: 1
    • ☆

    Got it. Thank you so much.

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