F 6 UK ACCA free course note Basic Computation 1.1

ACCA F6 | Taxation (UK)

Basic Income Tax Computation 1.1

Income tax

Payable by individuals on their earnings and investment income.

Tax Year

Individuals are assessed to income tax on their income arising in a tax year. Tax year starts from 6 April to 5 April. Thus the year from 6 April 2009 to 5 April 2010 is referred to as the tax year 2009/10.

Proforma income tax computation

Richard Hanson

Income tax computation- 2009/10

	Total Income £	Other Income £	Savings Income £	Dividend Income £
Employment income Trading income Property income Building society interest × (100/80) UK dividend × (100/90) Total income Less: Reliefs Interest (for qualifying purpose) Loss reliefs Net income Less: Personal Allowance Taxable income	XX XX XX XX XX XX (XX) (XX) XX (XX) XX	XX XX XX XX (XX) (XX) XX (XX) XX	XX XX XX XX	XX XX XX XX

Income tax	£
On other income At basic rate (20%) At higher rate (40%) On savings income At starting rate (10%) At basic rate (20%) At higher rate (40%) On dividend income At ordinary rate (10%) At special rate (32.5%) Income tax liability Less: Tax suffered on Dividend Bank interest Building society interest PAYE Other taxed income Income tax payable	XX XX XX XX XX XX XX XX (XX) (XX) (XX) (XX) (XX) XX

Gain an easy half mark!!!

If there is any exempt income item in question, must mention in your answer that it is exempt. E.g. “Interest on ISA- exempt”