Topic 12 - Earnings

Question 1

Who sets tax and NI amount?

Answer 1

Chancellor of the exchequer

Question 2

What are the working time regulations?

Answer 2

An employee can work a maximum of 48 hours a week over 17 weeks
- an employee who works 5 days a week is entitled to at least 5.6 weeks paid holiday per year
- an employee is entitle to at least 11 consecutive hours rest in any 24 hr period
- when the working day is longer than 6 hours, they are entitled to a minimum of 20 minute rest

Question 3

Define personal allowance

Answer 3

A certain amount of money earned before paying income tax

Question 4

Income tax for self employed:

Answer 4

They pay income tax and class 4 NI contributions

Question 5

Where is income tax and NI contributions paid to?

Answer 5

Her Majesty’s Revenue and Customs

Question 6

Features of a P45

Answer 6

• tax code and PAYE reference number
• NI number
• leaving date
• earnings in the tax year paid so far
• income tax paid in the tax year

Question 7

What is a P60?

Answer 7

issued by employers at the end of the tax year, which summaries tax paid and proved how much employees have earned