Thomas is self-employed, and for the year ended 5 April his trading profit was £111,100

Accounting Jan 25, 2021

Thomas is self-employed, and for the year ended 5 April his trading profit was £111,100. During the tax year 2019/20, Thomas made a gift aid donation of £800 (gross) to a national charity. 19. What amount of personal allowance will Thomas be entitled to for the tax year 2019/20? £ (3 marks)

Expert Solution

In UK Personal allowance for 2019/20 is GBP 12,500 for tax payers. But income limit is GBP 100,000.

If income above the GBP 123,700 no personal allowance given to taxpayer. Between GBP 100,000 to GBO 123,700 reduced for every 50% of excess amount.

As per given information sole trader income is GBP 111,100.

So 50% of 11,100 ( 111,100 - 100,000) need to deduct from GBP 12,500.

Hence 12,500 - 5,550 = 6,950

Thomas will get personal allowance of GBP 6,950 for year 2019/20

Hope given answer will solve your query.

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