UUΒγΑΔΦ±²₯

Proforma income tax calculation


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns

Proforma income tax calculation


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns
imgtext

The proforma for calculating an individual’s tax liability is very important. The method for arriving at the tax due is set out step by step in ITA 2007, s 23. This is illustrated in Proforma 1 ― income tax calculation and is explained in words below.

The tax software will calculate the tax due automatically based on the entries made on the tax return, however, it is important to know the principles of the income tax computation in order to check it is correct.

The calculation for the tax years 2023/24 to 2027/28 is modified where these include transition profits from 2023/24 due to basis period reform. This is discussed below.

Impact of basis period reform on the income tax computation

Basis period reform means that self-employed taxpayers transition to a tax year basis from 2023/24. As this may give rise to more than 12 months of income being taxable in the 2023/24 tax year, transitional rules apply to the taxation of the extra income, known as β€˜transition profits’. The taxpayer may also elect to spread the

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL
Powered by
  • 19 Dec 2024 15:42

Home/ Tolley Tax Guidance/ Personal Tax / Other supplementary pages

Popular Articles

Owner-Managed Businesses

SEIS and EIS ― overview

SEIS and EIS ― overviewThe seed enterprise investment scheme (SEIS) and enterprise investment scheme (EIS) are very similar schemes which offer substantial tax incentives to investors in companies which qualify. The tax incentives for SEIS and EIS investments are intended to encourage investment in

14 Jul 2020 13:31 | Produced by Tolley Read more Read more
Trusts and Inheritance Tax

Outright gifts

Outright giftsAn outright gift is the most straightforward type of gift. It simply involves the outright transfer of property from one person to another with no conditions attached.This type of gift is most suitable for clients who want to pass over modest amounts, or give to responsible and capable

14 Jul 2020 12:22 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more Read more
Employment Tax

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more Read more