The correct answer is: £2,463
|
|
N/S
£ |
S
£ |
D
£ |
|
Earnings |
18,040 |
|
|
|
BDI £10,000 x 100
80 |
|
12,500 |
|
|
Dividends £14,400 x 100
90 |
|
|
16,000 |
|
Net income |
18,040 |
12,500 |
16,000 |
|
Less PA |
(8,105) |
|
|
|
Taxable income |
9,935 |
12,500 |
16,000 |
|
|
|
|
£ |
|
(9,935 + 12,500) £22,435 @ 20% |
|
|
4,487 |
|
(34,370 + 1,950 - 22,435) = £13,885 @10% |
|
|
1,389 |
|
(16,000 - 13,885) = £2,115 @ 32.5% |
|
|
687 |
|
|
|
|
6,563 |
|
Less tax suffered:
Dividend |
|
|
(1,600) |
|
BSI |
|
|
(2,500) |
|
Tax payable |
|
|
2,463 |
The basic rate band is extended by the gross amount of the gift aid donation. (100/80 x £1,560)
|
