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Tax Notes

LPC Law Notes > Business Law and Practice Notes

This is an extract of our Tax document, which we sell as part of our Business Law and Practice Notes collection written by the top tier of Cambridge And Oxilp And College Of Law students.

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Income Tax

Step 1 Calculate grossed up total of all income

Step 2 Work out net income

Salary Savings Interest (Net Interest x 100/80) Dividends (Net Interest x 100/90) Benefits in Kind Total Income Total Income (Pension Contributions) (Charges on Income) Net Income

Step 3 Work out taxable income: Person allowance = PS10,600 Reduced allowance for income over
PS100,000 =
PS10,600 - (Net Income PS100,000) 2

Net Income (Personal Allowance) Net Income

Step 4 Apply tax rates to n0n-savings, savings and dividends using the tax rates provided. Use the tax jug, taxing each part on top of the other.

Step 5 Add all taxes together to create the Total Tax Liability

Non-Savings Income Tax Savings Income Tax Dividend Income Tax Total Tax Liability

Step 6 Find the difference between the net and gross savings and deduct for the tax at source

Total Tax Liability (Tax Deducted at Source) Total Tax Payable to HMRC

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