CH2 - Calculating the Income Tax Liability

Question 1

Taxable income is calculated by combining ?

Answer 1

all sources of income, less deductible payments and finally deducting the available personal allowance.

Question 2

The personal allowance is ?, but where adjusted net income exceeds £100,000 it is reduced by ?

Answer 2

£12,570 in 2023/24.
one half of the excess.

Question 3

Non-savings income is then subject to UK tax at the main rates in 2023/24 as follows:

Answer 3

• First £37,700 at 20% (basic rate)
• Next £87,440 at 40% (higher rate)
• Rest at 45% (additional rate)

Question 4

Any tax paid at source, such as PAYE, is ?

Answer 4

deducted to find the tax due or repayable for the year.