AAT L4 Personal Tax

Question 1

For 2025/26, what is the personal allowance for a UK individual with total income of £80,000?

Accepted Answer

£12,570

Answer

The personal allowance for 2025/26 is £12,570. It is reduced by £1 for every £2 of adjusted net income above £100,000. Since income of £80,000 is below £100,000, the full allowance applies.

Question 2

A UK taxpayer has employment income of £60,000 and receives bank interest of £500. How much of the bank interest is tax-free under the Personal Savings Allowance?

Accepted Answer

£500

Answer

A higher rate taxpayer (income between £50,271 and £125,140) receives a Personal Savings Allowance of £500. Since the bank interest is exactly £500, the entire amount is covered by the PSA and is tax-free.

Question 3

An employee receives a company car with a list price of £30,000 and CO2 emissions of 120 g/km. The appropriate percentage is 30%. What is the annual car benefit charge?

Accepted Answer

£9,000

Answer

Car benefit = List price x Appropriate percentage = £30,000 x 30% = £9,000. This amount is added to the employee's taxable income.

Question 4

Which of the following is exempt from Income Tax for a UK employee?

Accepted Answer

Employer's contribution to a registered pension scheme

Answer

Employer contributions to a registered pension scheme are exempt from Income Tax for the employee. The contribution is an allowable expense for the employer. Bonuses, fuel benefits, and cash gifts are all taxable.

Question 5

A taxpayer sells a residential property (not their main residence) in August 2025. By when must they report and pay Capital Gains Tax to HMRC?

Accepted Answer

Within 60 days of completion

Answer

UK residents must report and pay CGT on residential property disposals within 60 days of completion. This applies to properties that are not the individual's main residence.

AAT Level 4 Practice Test

AAT Level 4 Practice Test

AAT L4 Personal Tax