We calculate for the taxable income by subtracting the tax free allowance from the gross income.
Taxable income = Gross income - tax free allowanc
Taxable income = (£12,000 - £6,475)
= £5,525
Hence, the taxable income is equal to £5,525.
Net income:
This would be equal to the gross income minus the amount of taxes to be paid.
Net income = Gross income - amount of tax to be paid
Net income = (£12,000) - (0.20)($5,525)
Net income = $10,895
Therefore,
ANSWER: $10,895
