ACCA Applied Skills · Taxation (UK) · The scope of income tax
Priya received child benefit of £1,800 in the tax year. Her adjusted net income is £75,000. What is the child benefit income tax charge, using 1% of the benefit for every £200 of income over £60,000?
The charge is £1,350. Income is £15,000 over the £60,000 threshold, giving 75 blocks of £200. That is a 75% charge on the £1,800 of child benefit received, so £1,350 is payable.
- A£1,350Correct
- B£1,800
- C£450
- D£1,080
Explanation
Income over £60,000 is £15,000. £15,000 / £200 = 75, so the charge is 75% of the benefit. 75% x £1,800 = £1,350. The £450 option is the 25% left uncharged, taken in error.
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