2.2.1 Calculating Income Tax
This quiz tests your ability to calculate the Income Tax you should pay on an income.
Activity 2
a.
£5000
b.
£6000
c.
£3000
d.
£1500
The correct answer is c.
c.
Well done. The full computation is as follows:
Income from employment or pension £26,850
Minus personal allowance £11,850
Taxable pay £15,000
Basic rate 20% on £15,000 is £3000
Tax to be paid in the year 2018/19 is therefore £3000
£3000 of tax would be paid.
This is calculated as follows: first, subtract the tax-free amount of £11,850 from £26,850 to give £15,000 of taxable income. The next £15,000 is taxed at 20%. This is £3000.