Question

How much Income Tax would be paid by someone earning £30000 in a tax-year when the basic rate of Income Tax is 20% and the annual tax-free personal allowance is £12000?

Answer 1

£3600.

Explanation:

The taxable income would be the amount earned minus the tax-free personal allowance. So, for someone earning £30000 and with a personal allowance of £12000, their taxable income would be:

£30000 - £12000 = £18000

The basic rate of Income Tax is 20%, so the amount of tax owed on the taxable income would be:

20% x £18000 = £3600

Therefore, the Income Tax paid by someone earning £30000 with a personal allowance of £12000 would be £3600.