ATT Personal Tax Paper 1 – Association of
Taxation Technicians Personal Taxation
Practice Exam 2026 | Practice Questions &
Study Guide | Complete Exam-Style Questions
with Correct Detailed Answers & Rationales
(Reliable Answers) | Latest Updated Version |
Instant Download PDF
1.
For the 2026/27 tax year, an individual resident in England has
adjusted net income of £110,000. Assuming no other
adjustment is relevant, what is the individual's Personal
Allowance?
A. £12,570
B. £10,000
C. £7,570
D. £5,000
Rationale: The standard Personal Allowance is £12,570. It is
reduced by £1 for every £2 of adjusted net income above
£100,000. The excess is £10,000, producing a reduction of
,£5,000. Therefore, the remaining Personal Allowance is £7,570.
The allowance becomes nil at adjusted net income of £125,140.
2.
Which statement correctly describes the 2026/27 dividend
allowance?
A. It is £1,000 and is taxed at 0%.
B. It is £2,000 and is taxed at the basic rate.
C. It is £500 and is deducted from total income before
calculating the Personal Allowance.
D. It is £500 and dividends above the allowance are taxed at
the applicable dividend rates.
Rationale: For 2026/27, the dividend allowance is £500. It is not
a deduction from total income and does not operate by
extending the Personal Allowance. Dividends above the
allowance are taxed according to the taxpayer's applicable
dividend rate: 10.75%, 35.75% or 39.35%.
3.
An employee drives 12,000 business miles during 2026/27 in
their own car. Their employer pays the approved mileage
,allowance rate for the first 10,000 miles and the rate applicable
thereafter. What is the total tax-free approved amount?
A. £5,400
B. £5,000
C. £6,000
D. £6,600
Rationale: From 6 April 2026, the approved mileage rate for
cars and vans is 55p per mile for the first 10,000 business miles
and 25p for subsequent business miles. The calculation is £5,500
(10,000 × 55p) plus £500 (2,000 × 25p), giving £6,000.
4.
Which of the following is generally taxable employment
income?
A. A genuine reimbursement of an employee's allowable
business expense
B. An employer contribution to a registered pension scheme
C. A cash bonus paid because of the employee's performance
D. A qualifying trivial benefit costing less than £50
Rationale: A cash bonus is employment income and is taxable
through the employment income rules. Genuine qualifying
business-expense reimbursements and employer pension
contributions can receive specific tax treatment, while
, qualifying trivial benefits may be exempt. A trivial benefit must
satisfy the statutory conditions, including the £50 cost limit and
the requirement that it is not cash or a cash voucher.
5.
An employee receives a qualifying trivial benefit from their
employer costing £45. The benefit is not cash, is not provided
under a contractual obligation and is not provided in
recognition of particular services. What is the normal Income
Tax treatment?
A. The entire £45 is taxable.
B. Only £5 is taxable.
C. The £45 is exempt.
D. It is taxable unless the employee is a director.
Rationale: A qualifying trivial benefit costing no more than £50
can be exempt where the statutory conditions are met. The
benefit must not be cash or a cash voucher, must not exceed
£50, must not arise from a contractual obligation or relevant
salary-sacrifice arrangement, and must not reward particular
services. Directors of close companies have an additional annual
£300 cap, but being a director does not automatically make
every trivial benefit taxable.
Taxation Technicians Personal Taxation
Practice Exam 2026 | Practice Questions &
Study Guide | Complete Exam-Style Questions
with Correct Detailed Answers & Rationales
(Reliable Answers) | Latest Updated Version |
Instant Download PDF
1.
For the 2026/27 tax year, an individual resident in England has
adjusted net income of £110,000. Assuming no other
adjustment is relevant, what is the individual's Personal
Allowance?
A. £12,570
B. £10,000
C. £7,570
D. £5,000
Rationale: The standard Personal Allowance is £12,570. It is
reduced by £1 for every £2 of adjusted net income above
£100,000. The excess is £10,000, producing a reduction of
,£5,000. Therefore, the remaining Personal Allowance is £7,570.
The allowance becomes nil at adjusted net income of £125,140.
2.
Which statement correctly describes the 2026/27 dividend
allowance?
A. It is £1,000 and is taxed at 0%.
B. It is £2,000 and is taxed at the basic rate.
C. It is £500 and is deducted from total income before
calculating the Personal Allowance.
D. It is £500 and dividends above the allowance are taxed at
the applicable dividend rates.
Rationale: For 2026/27, the dividend allowance is £500. It is not
a deduction from total income and does not operate by
extending the Personal Allowance. Dividends above the
allowance are taxed according to the taxpayer's applicable
dividend rate: 10.75%, 35.75% or 39.35%.
3.
An employee drives 12,000 business miles during 2026/27 in
their own car. Their employer pays the approved mileage
,allowance rate for the first 10,000 miles and the rate applicable
thereafter. What is the total tax-free approved amount?
A. £5,400
B. £5,000
C. £6,000
D. £6,600
Rationale: From 6 April 2026, the approved mileage rate for
cars and vans is 55p per mile for the first 10,000 business miles
and 25p for subsequent business miles. The calculation is £5,500
(10,000 × 55p) plus £500 (2,000 × 25p), giving £6,000.
4.
Which of the following is generally taxable employment
income?
A. A genuine reimbursement of an employee's allowable
business expense
B. An employer contribution to a registered pension scheme
C. A cash bonus paid because of the employee's performance
D. A qualifying trivial benefit costing less than £50
Rationale: A cash bonus is employment income and is taxable
through the employment income rules. Genuine qualifying
business-expense reimbursements and employer pension
contributions can receive specific tax treatment, while
, qualifying trivial benefits may be exempt. A trivial benefit must
satisfy the statutory conditions, including the £50 cost limit and
the requirement that it is not cash or a cash voucher.
5.
An employee receives a qualifying trivial benefit from their
employer costing £45. The benefit is not cash, is not provided
under a contractual obligation and is not provided in
recognition of particular services. What is the normal Income
Tax treatment?
A. The entire £45 is taxable.
B. Only £5 is taxable.
C. The £45 is exempt.
D. It is taxable unless the employee is a director.
Rationale: A qualifying trivial benefit costing no more than £50
can be exempt where the statutory conditions are met. The
benefit must not be cash or a cash voucher, must not exceed
£50, must not arise from a contractual obligation or relevant
salary-sacrifice arrangement, and must not reward particular
services. Directors of close companies have an additional annual
£300 cap, but being a director does not automatically make
every trivial benefit taxable.
