From 2537007be076d9d1530f999a9564afc138f9b319 Mon Sep 17 00:00:00 2001
From: annadahmrc <177225793+annadahmrc@users.noreply.github.com>
Date: Mon, 10 Feb 2025 12:20:23 +0000
Subject: [PATCH] HMA-9175 Fixed negative taxable income to default 0 when
 income is less than tax free amount.

---
 CHANGELOG.md                                  |  1 +
 .../uk/gov/hmrc/calculator/Calculator.kt      | 12 +++++--
 .../uk/gov/hmrc/calculator/CalculatorTests.kt | 36 +++++++++++++++++++
 3 files changed, 46 insertions(+), 3 deletions(-)

diff --git a/CHANGELOG.md b/CHANGELOG.md
index 9234b49..06f474e 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,7 @@ The format is based on [Keep a Changelog](http://keepachangelog.com/)
 and this project adheres to [Semantic Versioning](http://semver.org/).
 
 ## [Unreleased]
+- Fixed negative taxable income to default 0 when income is less than tax free amount.
 - Fixed default tax code comparison when Tapering not applied and yearly income above 100k.
 
 ## [2.14.1] - 2024-10-15Z
diff --git a/src/commonMain/kotlin/uk/gov/hmrc/calculator/Calculator.kt b/src/commonMain/kotlin/uk/gov/hmrc/calculator/Calculator.kt
index 9605f37..44f8a53 100644
--- a/src/commonMain/kotlin/uk/gov/hmrc/calculator/Calculator.kt
+++ b/src/commonMain/kotlin/uk/gov/hmrc/calculator/Calculator.kt
@@ -121,9 +121,11 @@ class Calculator @JvmOverloads constructor(
         val studentLoan = StudentLoanCalculation(taxYear, yearlyWages, studentLoanPlans)
         studentLoan.studentLoanClarification?.let { listOfClarification.add(it) }
 
-        val taxableIncome = amountToAddToWages?.let { kCodeAdjustedAmount ->
-            (yearlyWageAfterPension - taxFreeAmount) + kCodeAdjustedAmount
-        } ?: (yearlyWageAfterPension - taxFreeAmount)
+        val taxableIncome = (
+            amountToAddToWages?.let { kCodeAdjustedAmount ->
+                (yearlyWageAfterPension - taxFreeAmount) + kCodeAdjustedAmount
+            } ?: (yearlyWageAfterPension - taxFreeAmount)
+            ).coerceAtLeast(ZERO)
 
         return createResponse(
             taxCodeType,
@@ -414,4 +416,8 @@ class Calculator @JvmOverloads constructor(
         val method: PensionMethod,
         val contributionAmount: Double,
     )
+
+    private companion object {
+        const val ZERO = 0.0
+    }
 }
diff --git a/src/commonTest/kotlin/uk/gov/hmrc/calculator/CalculatorTests.kt b/src/commonTest/kotlin/uk/gov/hmrc/calculator/CalculatorTests.kt
index a526588..2aa39e5 100644
--- a/src/commonTest/kotlin/uk/gov/hmrc/calculator/CalculatorTests.kt
+++ b/src/commonTest/kotlin/uk/gov/hmrc/calculator/CalculatorTests.kt
@@ -36,6 +36,38 @@ import kotlin.test.assertTrue
 
 internal class CalculatorTests {
 
+    @Test
+    fun `GIVEN TWENTY_TWENTY_FOUR WHEN wage is less than personal allowance THEN calculates response`() {
+        val result = Calculator(
+            taxCode = "1257L",
+            userSuppliedTaxCode = false,
+            wages = 7000.0,
+            payPeriod = PayPeriod.YEARLY,
+            taxYear = TaxYear.TWENTY_TWENTY_FOUR
+        ).run()
+        Logger.i(result.prettyPrintDataClass())
+
+        assertEquals(Country.ENGLAND, result.country)
+        assertFalse(result.isKCode)
+
+        val yearly = result.yearly
+        assertEquals(PayPeriod.YEARLY, yearly.payPeriod)
+        assertEquals(ZERO, yearly.employeesNI)
+        assertEquals(ZERO, yearly.employersNI)
+        assertEquals(7000.00, yearly.wages)
+        assertEquals(12570.0, yearly.taxFree)
+        assertEquals(ZERO, yearly.taxToPay)
+        assertEquals(7000.0, yearly.takeHome)
+        assertEquals(ZERO, yearly.pensionContribution)
+        assertEquals(7000.0, yearly.wageAfterPensionDeduction)
+        assertEquals(ZERO, yearly.taperingAmountDeduction)
+        assertNull(yearly.studentLoanBreakdown)
+        assertEquals(ZERO, yearly.finalStudentLoanAmount)
+        assertEquals(ZERO, yearly.finalPostgraduateLoanAmount)
+        assertEquals(ZERO, yearly.otherAmount)
+        assertEquals(ZERO, yearly.taxableIncome)
+    }
+
     @Test
     fun `GIVEN TWENTY_TWENTY_ONE WHEN 40000 wage THEN calculates response`() {
         val result = Calculator(
@@ -1957,4 +1989,8 @@ internal class CalculatorTests {
 
         assertEquals(listOfExpectedResult, result.listOfClarification)
     }
+
+    private companion object {
+        const val ZERO = 0.0
+    }
 }