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The basic personal allowance has been abated on the 2014 tax computation

Article ID
ias-12104
Article Name
The basic personal allowance has been abated on the 2014 tax computation
Created Date
13th October 2015
Product
IRIS Personal Tax
Problem
The 2013/14 tax computation shows a lower amount of personal allowance than expected
Resolution
If the clients income exceeds £100,000 their personal allowance will be abated at a rate of £1 for every £2 they earn over the 100K threshold. Currently the IRIS computation does not show a breakdown of the abatement calculation- this has been added to our enhancement request list for possible development within a future version. Example of an abatement calculation Income = £113, 587 Minus = £5, 652 which is made up of pension payments 5, 533 and gift aid 95 x 100/80 = 119 Total = £107, 935 Minus = £100,000 Income Limit for Personal Allowances Total = £7, 935 x 50% = £3967.50 Personal Allowance = 9440 – 3967 = 5473 Where excluded income is concerned please see knowledge base item 10608.

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