ACCA · Question 31 · Income tax and national insurance contributions

Section C

Dr. Elena Rostova is a highly paid consultant in the renewable energy sector. You are required to calculate her Income Tax Liability for the tax year 2023/24.

She has the following income and outgoings for the tax year 2023/24:

1. Employment Income:

• Gross salary of £115,000 from 'Eco-Power Ltd'.
• Eco-Power Ltd provided her with an electric company car (zero CO2 emissions) with a list price of £45,000 for the whole tax year.
• Elena made gross contributions of £8,000 into her employer's occupational pension scheme (deducted under the net pay arrangement).

1. Self-Employment Income:

• Elena runs a small side-hustle providing independent environmental audits. Her gross income from this was £2,500. She incurred actual allowable expenses of £1,800.

1. Property Income:

• Elena owns a commercial warehouse which she rents out. She received £12,000 in rent. Allowable expenses (insurance and maintenance) were £3,000.

1. Investment Income:

• She received £4,000 in dividends from UK companies.
• She received £1,500 in interest from a UK savings account.

1. Personal Pension:

• Elena made a net contribution of £4,800 into a personal pension scheme during the year.

Required:
Calculate Dr. Elena Rostova's Income Tax Liability for the tax year 2023/24.

Note: You should clearly show all workings, including the calculation of her Adjusted Net Income (ANI) to determine her Personal Allowance, and the extension of her basic rate band.