Income Tax Arithmetic. Income Tax The table shows the tax rates in force at the present time. Rate of TaxTaxable Income Lower rate 20%£1  £2 500 Basic.

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Presentation transcript:

Income Tax Arithmetic

Income Tax The table shows the tax rates in force at the present time. Rate of TaxTaxable Income Lower rate 20%£1  £2 500 Basic rate 25%£2501  £ Higher rate 40%Over £ Notes : (i) Superannuation payments are 6% of his gross salary. (ii) Other tax free allowances can be claimed. These vary for each family. (iii) Total Allowances = Superannuation Payments + Other tax allowances. Taxable Income = Gross Wage – Total Allowances

Calculate the amount of tax to be paid in each of the examples below. 1.Gross Income = £38,450 Other tax free allowances = £5,800 2.Gross Income = £44,850 Other tax free allowances = £6,200 3.Gross Income = £50,050 Other tax free allowances = £7,800 4.Gross Income = £55,000 Other tax free allowances = £6,940 5.Gross Income = £68,450 Other tax free allowances = £7,525 6.Gross Income = £72,400 Other tax free allowances = £6,750 7.Gross Income = £84,240 Other tax free allowances = £8,220 8.Gross Income = £28,650 Other tax free allowances = £7,428 9.Gross Income = £80,020 Other tax free allowances = £5, Gross Income = £18,050 Other tax free allowances = £8, Gross Income = £98,750 Other tax free allowances = £7, Gross Income = £140,000 Other tax free allowances = £3,610