Imogen's Tax Calculations
Added on 2019-09-16
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Question 1On 31 December 2016, Imogen resigned as an employee of Dhissom plc. The company had employed her as pastry chef since 2001. On 1st January 2017, Imogen was now self-employed and started running her own Indian restaurant, preparing accounts to 30thSeptember. She is now self-employed as from 01 January 2017. The following information is available for the tax year 2016/17.Employment1.During the period 6th April 2016 to 31st December 2016 Imogen’s total gross salary from her employment with Dhissom plc was £57,000. Income tax of £9,505 was deducted fromthis figure under PAYE.2.Imogen used her personal motor car for both business and private purposes during the period from 6th April 2016 to 31st December 2016 as an employee of Dhissom plc . She received no reimbursement from Dhissom plc for any of the expenditure incurred. Imogen’s total mileage during the period was 15,000 miles, shown as below: No. of milesNormal daily travel from home and workplace4,650Voluntary travel from home and workplace to turn off the fire alarm120Travel from workplace and suppliers 750Travel from home to a seconded temporary workplace for two months3,800Private travel5,680Total miles15,0003.On 1st October 2016, Dhissom plc paid £13,000 towards Imogen’s removal expenses when she permanently relocates to Taunton, to work in a restaurant owned by Dhissom plc.4.Imogen contributed 6% of her gross salary of £57,000 into Dhissom plc’s HMRC approved occupational pension scheme.
Self-Employment1.Imogen’s income statement for her Indian restaurant for the 9 month period ended 30thSeptember 2017 is as follows:££Gross Profit192,300Depreciation5,250Motor expenses note 24,200Property expensesnote 319,200Allowable expenses76,050(104,700)Net profit87,6002.Imogen purchased her Indian restaurant on 1st January 2017. 3.She lives in an apartment that is situated above the restaurant and 25% of the total property expenses of £19,200 relate to this apartment. 4.On 1st January 2017, Imogen purchased a motor car with CO2 emissions of 125 g/km for £16,667 and cooking equipment for £5,400.5.During the period 1st January to 30th September 2017, Imogen drove a total of 6,000 miles, of which 1,500 miles were for visiting her mother who lived in Exeter. You can assume that HMRC have agreed to a further 500 miles for private journey.Other income1.During the tax year 2016/17, Imogen received bank deposit interest of £3,000 and dividends of £10,500.Additional Information1.Imogen contributed £1,600 into a personal pension scheme during the period 1st January 2017 to 5th April 2017.2.She did not make any payments on account of income tax in respect of the tax year 2016-17.Required(a)Calculate Imogen’s tax adjusted trading profit for the nine month period ended 30thSeptember 2017.
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