AAT L4 Personal Tax (UK Income Tax)

Question 1

For the tax year 2024/25, the personal allowance is:

Accepted Answer

£12,570

Answer

The personal allowance for 2024/25 is £12,570 — unchanged since 2021/22. It is reduced by £1 for every £2 of adjusted net income above £100,000, reaching nil at £125,140.

Question 2

UK income tax rates for non-savings income in 2024/25 are: basic rate applies up to taxable income of:

Accepted Answer

£37,700

Answer

The basic rate band for income tax in 2024/25 covers taxable income from £0 to £37,700 (after personal allowance). Income above this up to £125,140 is taxed at the higher rate (40%), and above that at the additional rate (45%).

Question 3

Employment income for income tax purposes includes:

Accepted Answer

Salary, bonuses, benefits in kind (e.g., company car, private medical insurance), and expense allowances not wholly for business use

Answer

Employment income encompasses all remuneration from employment: salary, wages, bonuses, tips, taxable benefits in kind (e.g., company car, medical insurance), and expense reimbursements not solely for business purposes.

Question 4

The benefit in kind for a company car is calculated based on:

Accepted Answer

The list price of the car multiplied by the appropriate percentage based on CO2 emissions

Answer

The taxable benefit = list price × appropriate percentage (determined by CO2 emissions band). Higher emissions attract higher percentages; zero-emission cars have the lowest benefit in kind percentage.

Question 5

Which of the following types of income is taxed first in the UK tax computation?

Accepted Answer

Non-savings income (employment, trade, rental)

Answer

The ordering of income for UK tax purposes is: (1) non-savings income, (2) savings income, (3) dividends. This ordering determines which income uses the basic rate band first and how the starting rate for savings and dividend allowances apply.

AAT Level 4 Practice Test

AAT Level 4 Practice Test

AAT L4 Personal Tax (UK Income Tax)