Income Tax Flashcards

1
Q

Give examples of allowable deductions

A

Interest payments in certain qualifying loans

Charitable giving-

Payroll giving is an allowable deduction - make contributions to nominated charity gross.
Gift aid is a basic rate band extender

Certain pension contributions:

Net pay arrangements: allowable deduction- taken off before tax calculation

Relief by claim scheme: allowable deduction, contributions to this paid gross

Relief at source schemes:

Here the contribution is paid net of 20% from after tax been deduction. Because of this the provider reclaims the brt paid, the contribution is then also a brt band extender

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2
Q

What can reduce your personal allowance?

A

Underpaid tax from previous years
Employee benefits like company car
Adjusted net income over 100,000

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3
Q

What tax code means get no personal allowance

A

A K tax code

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4
Q

What are the deductable allowances?

A

Personal allowance - 12,570

Personal savings allowance:
BRTP - 1000
HRTP - 500
ARTP - 0

Dividends Allowance:

For all tax payer £1000 allowance - note like advice thus will use up part of the basic or higher rate band for tax

Transferable personal allowance:

Married couples can transfer 10% of personal allowance - £1260 (rounded up) - note this can only be to a basic rate tax paying spouse. A higher or additional rate tax payer cannot receive this

Known as marriage allowance

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5
Q

What is the starting rate for savings income

A

5000

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6
Q

What are the dividends rate?

A

Where dividends exceed the 1k allowance they are taxed at the following rate

BRTP - 8.75%
HRTP - 33.75%
ARTP - 39.35

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