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

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?

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

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

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

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

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

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

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

13. Gift Aid & Pension Contributions
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)

14. PAYMENTS & PENALTIES

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

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

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

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

20. HOMEWORK
Read chapter 5
Tutorial book questions, 5.4, 5.6, 5.1, 5.2, 5.3, 5.5, 5.7