Personal Tax
Focus on income tax for individuals, national insurance and capital gains tax. Income tax is computed by applying the personal allowance and then the basic, higher and additional rates to taxable income in the order: non-savings, savings, dividends. The personal allowance tapers for high earners. Understand PAYE, self-assessment deadlines, payments on account and penalties.
National insurance: Class 1 primary and secondary contributions, Class 2 and 4 for the self-employed. Capital gains tax: proceeds less allowable cost and annual exempt amount, with different rates for residential property and other assets, plus business asset disposal relief.
Traps: applying the personal allowance before allocating income to bands incorrectly; forgetting the savings starting rate and dividend allowance; confusing the annual exempt amount with the personal allowance; missing the 60% effective rate from allowance tapering; forgetting that only the gain, not the whole proceeds, is taxed.
Rule of thumb: tax the gain, not the sale price. Worked example: sale proceeds £50,000, cost £30,000, selling costs £1,000. Gain = 50,000 − 30,000 − 1,000 = £19,000. Deduct the annual exempt amount, then apply the appropriate CGT rate to the remainder, considering the individual's remaining basic rate band.