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Managing my money
Managing my money

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2.2.1 Calculating Income Tax

This quiz tests your ability to calculate the Income Tax you should pay on an income.

Activity 2









The correct answer is 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.