I have a question regarding personal tax computations in the BPP text which is on page 37 example C. The question is: Jim was born in 1966. He does not work. In 2014/2015, he receives net bank interest of £38732.
In calculating it, the taxable income is £38415, the tax liability is £8705 and the tax payable is (£1378). What I don’t understand is £50415 is used to get the tax deducted at source instead of £48415 (£38732 × 100/80) . Why not the £48415?
Thanks in advance!
I do not have the BPP material and cannot answer your question from the information that you have provided, but I can see no reason why the gross bank interest is the figure they give – other than they have not updated correctly from last year’s question and answer as the tax liability looks to be correctly computed using a total income of 48,415 as you have stated!
Thank you Sir!
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