PTP Personal allowance being given for clients with an income over £100,000
Article ID
kba-03018
Article Name
PTP Personal allowance being given for clients with an income over £100,000
Created Date
10th January 2012
Product
Problem
The client is getting the full Personal Allowance even though the income exceeds £100,000.
Resolution
The Personal Allowance is calculated from the Adjusted Net Income, as opposed to the actual Net Income, as per the HMRC guidance. Adjusted Net Income is Net Income adjusted to take account of certain deductible allowances and reliefs i.e. donations made to charities through Gift Aid and some pension contributions. This may mean the Personal Allowance is reduced less than expected, or not at all, as the Adjusted Net Income is usually less than the Net Income.
For more information see the SA110 notes and search for Adjusted Net Income (https://www.gov.uk/government/publications/self-assessment-tax-calculation-summary-sa110).
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