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Financial questions I wasn’t expecting

November 26, 2018

So, I’ve taught a single lesson of Finance to one of my Core Maths classes and there are already things I’ve been asked that I didn’t know. Some I was able to look up at the time, some I had actually guessed might be a question and others I’m looking in to.

I used these 5 example payslips as a starting point (all from a google search for UK payslip examples). After spending a long time getting students to look at them and see what they have in common as well as asking anything they wanted to know, we moved on to looking at some basic tax calculations using the preliminary material from last year.

Here are some questions I was asked along with (some) answers:

What does BACS mean?

Basically it’s a bank to bank transfer. It stands for Banker’s Automated Clearing Service.

What does OSPP mean?

Ordinary Statutory Paternity Pay.

What does Attch: CSA mean?

A court order for an ‘attachment of earnings’ from the Child Support Agency.

Why does the tax year start in April?

Complex. Much easier to check out this article.

Why is the maximum for Child Tax Credits £243 per month.

I don’t know. I can tell you it’s £55 per week and it’s separate for each parent but that’s not much help.

Why does the gross for National Insurance value sometimes appear a few pounds less than the gross for tax?

Not sure about this one either. Have a look at the payslips for examples though.

In the preliminary material, it says “To calculate your income tax if your annual income is £100 000 or less” and then some instructions. What is different if you earn more than £100 000 ?

Also don’t know yet.

What’s the difference between Nil National Insurance and 0% National Insurance?

Essentially, Nil means you haven’t contributed. Your benefits could be affected if there are gaps in your National Insurance record. If you fall in to the 0% band, you’re considered to have contributed to National Insurance even though you haven’t actually paid any money.

Do you only pay tax when you are 18 years old?

No. You’re eligible to pay tax and National Insurance from age 16 if you reach the thresholds for either of them.

Why are the words ‘Gross’ and ‘Net’ used?

Don’t know and am struggling to find out.

That’s it for now. I hope you’ve learnt something and if you can answer any of the ones I couldn’t, please leave a comment!

 

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From → Core Maths, Level 3, Maths

2 Comments
  1. Ian Pethick permalink

    In the preliminary material, it says “To calculate your income tax if your annual income is £100 000 or less” and then some instructions. What is different if you earn more than £100 000 ?

    When someone earns over £100 000 for every additional £2 they earn their personal allowance is reduced by £1 (which effectively means they pay a 60% marginal tax rate rather than 40% on their income between £100 000 and £123 700)

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