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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Income Tax Question from ACCA website (Example 2)
Good Day
I was practising the questions and came across this one:
EXAMPLE 2
For the tax year 2020-21, May has a trading profit of £159,000. During the year, May made net personal pension contributions of £32,000 and a net gift aid donation of £9,600. Her income tax liability is:
The answer was:
Trading profit
159,000
Personal allowance
(9,000)
______
Taxable income
150,000
______
Income tax:
37,500 at 20%
52,000 at 20%
60,500 at 40%
7,500
10,400
24,200
______
Tax liability 42,100
My question is, how come we didn’t include the nil rate band of 500 @ 0% for higher rate tax payers since the taxable income is 150 000 which is within the higher rate tax band?
I have done all other calculations correctly except for adding in this nil rate band?
***
I have realised my mistake sir, this was only Non-savings income and not savings income.
My apologies, what an error =(
Pleased that you were able to correct your own mistake
