Tx notes fa22 Final

June 2023 to March 2024 exams
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Example 1 
Janice is both an employee and self employed, her tax liability for 2021/22 was as follows:
For 2022/23 her total income tax liability was £14,000 with £2,000 being deducted at source. She 
had a class 4 NIC liability of £2,500 and a capital gains tax liability of £1,700
Show how her 2022/23 liability will be settled and determine the total amount of tax to be paid 
on January 31, 2024. 
Ignore Class 2 NIC
2. Interest on tax 
2.1. Late payments 
(a)
Interest is charged on late payment of tax at a rate of 3.25%.
For 2022/23:
(b)
Interest charged is not tax deductible for individuals.
(c)
In addition late payments of tax will attract a penalty as follows:
‣
If tax is paid more than one month late there will be a penalty of 5% of the amount due.
‣
Further penalties of 5% will be charged where tax is unpaid after six months and then 
again twelve months.
Note: 
The penalties only apply to the balancing payment, and not payments on account. They 
therefore cover income tax, NIC and capital gains tax paid late.
2.2. Repayment 
If tax is repaid, HMRC pay interest at a rate of 0.5% p.a. from 31 January, or if later, the date of 
original payment.
Interest received is not taxable for an individual.
Total Income tax liability
12,00
0
Less tax deducted at source
(1,000)
Income tax payable by self assessment
11,00
0
Class 4 NIC
2,000
13,00
0
Payment on account:
Interest runs from 31/1/2023 or 31/7/2023
Other payments:
Interest runs from 31/1/2024

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