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Chapter 2, Example 7 under the heading, Savings, How did you get the figure £8000 (20% rate) and £3500 (40% rate) in the answer?
ThanksLook at the calculation of the tax liability – non savings taxable income uses 25,000 of the 33,500 basic rate band (BRB), thus leaving 8,500 of the BRB remaining.
Of the 12,000 taxable savings income then to be taxed, the first 500 is covered by the savings income nil rate but this still uses up 500 of the BRB, therefore leaving 8,000 BRB remaining. Thus the remaining taxable savings income of 11,500 is taxed – 8,000 at 20% (using the remaining BRB) and leaving 3,500 to be taxed in the higher rate band.
The tax calculation working shows how the 12,000 is charged to tax.
Have you watched the lecture?
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