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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4715
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am 72 years old and have had tax demand for £2784.88, but

Customer Question

I am 72 years old and have had tax demand for £2784.88, but revenue has only given my personal allowance as £9440.00 when surely it should be £10500.00
My total income received was £34611.00
regards
Ray Tilbury
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.

Hello and welcome to the site. Thank you for your question.

Your personal allowance of £10,500 is reduced if net income exceeds £26,100. Your allowance would go down by £1 for every £2 that your adjusted net income exceeds this threshold.

Your earnings were £34,611 and they are (34,611-26,100) £8,511 over the threshold to avail higher personal allowance. This would trigger the reduction of £1 for every £2 over £26,100. Maximum reduction in personal allowance (10,500-9,440) £1,060

It is for this reason that your personal allowance has been reduced to Basic allowance of £9,440.

More information on personal allowances is covered here

https://www.gov.uk/income-tax-rates/born-before-6-april-1948

I hope this is helpful and answers your question.

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