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Hello. I’m really confused. I’m talking about the answer to Example 10 on the page 11. The answer says that the personal allowance is 7600. How is it 7600 when trading income is 102,000? Shouldn’t it be 9600? (10600 – ((102,00 – 100,000) X 0.5)) Am I missing something?
Additional info: Bank interest was also received in that tax year: 3200. Does this change anything?
You are indeed missing something and yes the bank interest does matter! Go back and read the note in Section 3 that clearly explains the basis of the restriction of the PA and states that it is based on adjusted net income (NOT just trading income!) and defines adjusted net income (in this example 106,000). I would suggest you probably need to work through the notes in conjunction with the lectures to assist your understanding.
That’s right – again you may find it beneficial if you read the notes in conjunction with the lectures so that you may be sure you have correctly interpreted the notes.
Sir, practice question 6 in the back of OT notes involving personal pension contribution.
why have BRB and HRB not increased?
I think you may be looking at an earlier version of the notes where that answer had not been updated properly but if you look at the version of the notes currently online the answer is now correct.
Well spotted however as of course the BRB did need to be extended by the gross amount of the PPC
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