Barry , a self employed plumber , received the following income in 2012/13
Building society interest 4600, Dividend from a UK company 4500
Trading income 145 000. \he paid allowable interest of 300 on 13 August 2012. Calculate Barry's income tax liability for 2012/13.
Kindly help on this question. l don't understand why the answer is nil
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income tax liability
Who said it is ?
I am getting £55,476 (did it in a hurry, may b wrong but its definitely not zero)
PA is nil though
Non savings savings dividend total
trading income 145000
bsi 4500*100/80 5750
dividend 4500*100/90 5000
------------ ------------ ------- ----------
total income 145000 5750 5000 155750
less interest (300) (300)
-------------- -------------- ------------ -----------
net income 144700 5750 5000 155450
PA NIL
TAXABLE INCOME 144700 5750 5000 155450
====== ===== ==== =====
INCOME TAX
Non savings 34370*20% 6874
110330*40 44132
savings 5300*40% 2120
450*50% 225
dividend 5000*42.5% 2125
tax liability 2012/13 55475
As per previous replies clearly the income tax liability is not nil but the PA is reduced to nil as the adjusted net income of the taxpayer exceeds 116,210
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