Describe what is meant by a progressive income tax system and discuss one way that an income tax system may be structured so that it is progressive.

1.2a Complete Table 1 by using the Income tax and National Insurance calculator  to find Agnes's and Adam's pay after income tax and National Insurance have been deducted and, for each of them, their average total tax rate (not the average income tax rate). 

1.2b Based on Table 1 (now that you have completed it), explain which income tax system, that of Scotland or England, is more progressive.

1.3: Neeta's line manager had agreed that Neeta's net pay will increase (in line with inflation of 3%) to £20,200 two years later (in 2024/25). Over these two years, inflation is now predicted to average 6% per year. Using the Inflation calculator, select and report the relevant result from your calculation to help you explain whether in 2024/25 Neeta is likely to enjoy a standard of living that is higher, lower or the same as today.

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Table 1 Examples of pay at Clarke & McInnes Ltd (2022/23 tax year) Employee Residence Gross pay Pay after income tax and () National Insurance () Average total tax rate (%) Agnes England 65,000 Humza Scotland 65,000 44,422.55 31.66 Carrie England 31,400 25,139.03 19.94 Adam Scotland 31,400 Siobhan England 22,200 18,998.03 14.42 Neeta Scotland 22,200 19,019.65 14.33 Table 1 Examples of pay at Clarke & McInnes Ltd (2022/23 tax year) Employee Residence Gross pay Pay after income tax and () National Insurance () Average total tax rate (%) Agnes England 65,000 Humza Scotland 65,000 44,422.55 31.66 Carrie England 31,400 25,139.03 19.94 Adam Scotland 31,400 Siobhan England 22,200 18,998.03 14.42 Neeta Scotland 22,200 19,019.65 14.33

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