PTP Personal allowance being given for clients with an income over £100,000

Article ID

kba-03018

Article Name

Created Date

10th January 2012

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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