Seminar 2

Question 1

what is the personal allowance for individuals earning over £100,000?

Answer 1

If you earn over £100,000, the figure of £12,570 will be reduced by £1 for every £2 earned over the £100,000 limit

Question 2

what is the personal allowance for individuals earning over £125,140?

Answer 2

0

there’s no personal allowance for individuals earning over 125,140

Question 3

HMRC = ?

Answer 3

her majesty’s revenue & customs

a body of civil servants who collect tax

Question 4

what are the due dates of tax payments on account?

Answer 4

first POA = 31 Jan in same Tax Year

second POA = 31 Jul following Tax Year

third POA = 31 Jan following Tax Year

Question 5

notification of chargeability must be submitted by when?

Answer 5

within 6 months of the tax year end (October)

Question 6

notification of chargeability = ?

Answer 6

letting tax authorities know about your taxable income

Question 7

examples of exempt income = ?

Answer 7

ISA’s

premium bond winnings

national savings certificates

some social security benefits

Question 8

are married couples tax together or independently?

Answer 8

independently

Question 9

BRB, ARB & HRB = ?

Answer 9

basic rate band, additional rate band & higher rate band

Question 10

what are the tax rates & allowance for dividends?

Answer 10

ordinary rate = 8.75%
upper rate = 33.75%
additional rate = 39.35%

Question 11

adjusted net income = ?

Answer 11

net income - gift aid donations & personal allowance contributions

Question 12

how does marriage allowance work?

Answer 12

10% of basic PA may be transferred to one’s spouse (£1,260)

that £1,260 is referred to as marriage allowance

Question 13

how is the taxpayer’s spouse’s income tax liability impacted by marriage allowance?

Answer 13

the PA of the spouse is not increased by the amount transferred but his/her income tax liability is reduced by 20% of this amount = £252

Question 14

under what condition is marriage allowance unapplicable?

Answer 14

if either the taxpayer or the spouse pays tax at the higher or additional rate, the dividend upper or additional rate

Question 15

how do gift aid donations work?

Answer 15

the gift aid scheme provides an incentive for taxpayers to donate to charity due to tax benefits

they’re not deducted from the donor’s taxable income when calculating taxable income

the donor’s basic rate limit and higher rate limit are both increased by the gross amount of the gift (i.e. net x 100/80)