Income Charged to Income Tax
Classify and calculate employment, trading, property, savings, dividend, pension and miscellaneous income.
How to study the ATT Qualification
Use Finance Act 2025 for the 2026 tax papers, complete the three foundational CBEs early, apply professional ethics throughout and concentrate option practice on the one paper you will enter.
Core concepts
Concept 1
Income must be classified by source before exemptions, deductions, allowances and rates are applied.
Exam cue: Identify the person, source, amount, tax year and basis of assessment.
Concept 2
The statutory ordering of income and reliefs affects the final liability and use of allowances.
Exam cue: Build total income, apply deductions and allowances in statutory order, then calculate bands and rates.
Concept 3
Tax treatment follows the taxpayer, tax year and facts in the 2026 Finance Act 2025 syllabus.
Exam cue: Explain the treatment and any assumption in a client-ready format.
Risk pitfalls and guardrails
Netting receipts and expenses before deciding whether each is taxable or deductible.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Using an allowance or rate from a different Finance Act cycle.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Ignoring the effect of income on allowances, charges or rate bands.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Memory anchors
Source first
Classify each receipt before applying its tax rule.
Net income
Total income less qualifying deductions gives net income before allowances.
Taxable income
Apply available personal allowances before rate bands.
Employment benefit
Check whether the benefit is exempt, cash-equivalent or payrolled.
Property result
Use allowable property receipts and expenses for the correct property business.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
For 2025/26, Nia has salary of £32,000 and bank interest of £800. Her personal allowance is £12,570 and no other relief applies. What is her taxable income?
A basic-rate taxpayer receives £700 bank interest in 2025/26 and has a £1,000 personal savings allowance. How much income tax is due on the interest?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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