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Ann is self-employed. Her taxable income for the tax year 2018/19 was 76,000 which was all trading income. Ann made contribution of 49,000(gross) into a personal pension scheme between september 2018 and March 2019.
This was the second year that she had been member of a pension scheme she had an unused AA of 20,000 b/f from 2017/18.What is Ann’s income tax liability?
This question is Q 75 in the BPP revision kit and when i tried take to account PA since her income doesn’t exceed 100,000. but the Answer in the book did not take consider the PA so i’m confused.
My Answer.
76,000-11850=64,150.
basic rate 34500+49,000=83,500
so tax liability= 64,150*20%= 12,830Answer in the Book.
extend the basic rate 34,500+49,000=83,500, more than the whole trading income so
tax liability = 76,000*20%=15,200.When answering MCQ’s as I’ve said in lectures and notes, it is essential to read the question carefully – more carefully than you have done here – and understood what you have been told.
Look at the first line of the question (2nd sentence) –
“Her TAXABLE Income for ………”TAXABLE Income is AFTER deducting the PA
Hello,
I cannot find the solutions to the questions treated in the videos on taxation in the lecture notes. Is there a separate text for this? I am currently on income tax and this problem is recurrent.
Please assist.
Regards,
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