1. PTAX Personal Taxation Income Tax Computation (Pensions, Gift Aid, Personal Allowance) FA2015

2. Objectives To be able to: Identify income which is exempt from Income Tax Determine a taxpayer’s personal allowance Compute Income Tax payable, making appropriate adjustments for: Personal Pensions Gift Aid Determine payments on account Determine penalties due for lateness and error 2

3. EXEMPT INCOME

4. Tax-free Income What investment income is free of tax?

5. Tax-free benefits What cash-based benefits are free of tax? 5

6. Tax-free benefits What other employment benefits are free of tax? 6

7. Other Exempt Income What other income is tax free? Questions EX1, EX2

8. INCOME TAX COMPUTATION Including: Personal allowances Personal pensions Gift aid 8

9. 9 Personal Allowance (High Income) What happens to the personal allowance of high income taxpayers?What happens to the personal allowance of high income taxpayers?

10. 10 Adjusted net income What is “adjusted net income”

11. 11 Personal Allowance (Age-related) What is the age-related personal allowance?What is the age-related personal allowance? Questions IT1, IT2, IT3, IT4

12. 12 How does a basic rate taxpayer obtain tax relief on contributions to a personal pension? Gift Aid & Pension Contributions

13. 13 How does a higher rate taxpayer obtain tax relief on contributions to a personal pension? Increase basic rate band by gross amount Questions IT5, IT6, IT7, IT9 (optional) Gift Aid & Pension Contributions

14. PAYMENTS & PENALTIES 14

15. 15 When are Income Tax payments due? Payments on Account

16. 16 How much is each payment on account? Payments on Account

17. 17 Late Return What are the penalties for late submission of a tax return?

18. 18 Late Payment What are the penalties for late payment of Income Tax?

19. Incorrect Returns What is the penalty for submitting an incorrect tax return? Questions PP1, PP2 19