Personal Tax (UK Income Tax) Flashcards
6 cards from real AAT L4 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Personal Tax (UK Income Tax) flashcards as text
National Insurance Class 4 contributions are paid by self-employed individuals on trading profits. For 2024/25, the main rate on profits between the lower and upper profits limits is:
Answer: 6%
Class 4 NIC main rate was reduced to 8% from April 2024 and further reduced to 6% in later changes. Note rates are subject to change — check the applicable year. For 2024/25 the rate is 6%.
Which of the following is exempt from UK income tax?
Answer: Winnings from the National Lottery
Lottery and gambling winnings are exempt from UK income tax. Bank interest, rental income, and employment income (including overtime) are all taxable sources of income.
An employee's P60 is used to:
Answer: Provide a year-end summary of total pay and tax deducted under PAYE, required by the employee for self-assessment
The P60 is an annual summary provided by the employer to each employee, showing total earnings and PAYE income tax and NIC deducted in the tax year — used by employees to complete self-assessment returns and to check PAYE deductions.
Which of the following savings income is exempt from UK income tax?
Answer: Interest from a cash ISA
Interest earned within an Individual Savings Account (ISA) is exempt from UK income tax regardless of the amount or the individual's tax rate. All other forms of savings interest are taxable (though the personal savings allowance may cover some).
For income tax, the additional rate (45%) applies to taxable income above:
Answer: £125,140
The additional rate of 45% applies to non-savings taxable income above £125,140 (from 2023/24 onwards, reduced from £150,000). At £125,140, the personal allowance is also fully withdrawn.
Under the accruals basis for property income, rental income is assessed:
Answer: In the tax year to which the rent relates — i.e., when it is due and receivable
Under the accruals basis (default for property income with turnover above the cash basis threshold), rent is assessed in the tax year in which it accrues — when it is due and receivable, not necessarily when paid.