Question

Carys is checking her tax bill for the last year. The tax rates were as follows: No tax of the first £11 000 of earnings. Earnings in excess of of £11 000 and up to £43 000 taxed at a rate of 20%. Earnings in excess of £43 000 and up to £150 000 taxed at a rate of 40%. Earnings over £150 000 taxed at a rate of 45%. Last year Carys, earned £45 600 before tax. How much tax did she pay in total. Show your working.

It isn't £18240 it says its wrong

Answer 1

£11000 is the tax free allowance, so we deduct 11000 from 45600=34600. This qualifies for the 40% rate. That comes to £13,840.

Answer 2

total tax is = 14685 pound

Explanation:

Given data:

For first year -

earning is 11000 pound

for second year

income is = 43000 - 11000 = 32000 pound

tax rate = 20%

for third year

income is = 150000 - 43000 = 107000 pound

tax rate = 40%

for fourth year

income is = 158900 - 150000 = 8900 pound

tax rate = 45%

As it is given there is no tax on first year

Tax in 2nd year = 0.20 × 32000 = 6400 pound

Tax in 3rd year = 0.40 × 107000 = 42800 pound

Tax in 4th year = 0.45 × 8900 = 4005 pound