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Personal Tax (UK Income Tax) Flashcards

6 cards from real AAT L4 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Payrolled benefits replace the P11D for certain benefits in kind. The advantage of payrolling benefits is:

    Answer: The benefit is included in the employee's pay each pay period, deducting tax in real time rather than via a coding notice adjustment

    Payrolling benefits allows the taxable value to be added to pay in real time through PAYE, so employees pay the correct tax each month rather than through an adjustment to their tax code — avoiding underpayment issues.

  2. The personal savings allowance for a higher rate taxpayer in 2024/25 is:

    Answer: £500

    The personal savings allowance (PSA) is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate (45%) taxpayers receive no PSA. Interest up to the allowance is taxed at 0%.

  3. An individual is required to register for self-assessment and notify HMRC by:

    Answer: 5 October following the tax year end in which the liability first arose

    Individuals must notify HMRC of their obligation to file a self-assessment return by 5 October following the end of the tax year in which the liability first arose — failing to do so can result in penalties.

  4. Married couple's allowance (MCA) is available to:

    Answer: Married couples and civil partners where at least one partner was born before 6 April 1935

    The MCA is available where at least one spouse or civil partner was born before 6 April 1935, providing a tax reducer (not a deduction) of 10% of the allowance against income tax.

  5. UK income tax on interest received from a corporate bond held by an individual is charged at:

    Answer: The savings income rate (20%/40%/45% after the personal savings allowance)

    Interest from corporate bonds is savings income, taxed at the savings income rates: 0% (within the PSA or starting rate band), 20% (basic), 40% (higher), or 45% (additional) — not at dividend rates.

  6. In the tax year 2024/25, which of the following NIC contributions is paid by employers on employee earnings above the secondary threshold?

    Answer: Class 1 secondary (13.8% until April 2025, then 15% from April 2025)

    Employer Class 1 secondary NICs are charged on employee earnings above the secondary threshold. The rate was 13.8% until 5 April 2025, then increased to 15% from 6 April 2025 under changes announced in the October 2024 Budget.