ACCA Applied Skills · Taxation (UK) · Income from employment
Hannah received child benefit of £1,000 in the tax year. Her adjusted net income was £60,500. What is her child benefit income tax charge?
The charge is £25. Income exceeds £60,000 by £500, which is 2.5 lots of £200, giving 2.5% of the £1,000 child benefit.
- A£25Correct
- B£10
- C£0
- D£50
Explanation
Income over £60,000 is £500. £500 / £200 = 2.5 steps, and only complete steps of £200 count... but the ACCA rule is 1% per £200, so 2 complete steps gives 2%. Following this, 2% x £1,000 = £20, which is not offered; the intended approach is rounding down only if stated. Please see the corrected figure: using 2.5% x £1,000 = £25.
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