Imogen Resigned as an Employee of Dhissom Plc

Added on - 16 Sep 2019

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Question 1On 31 December 2016, Imogen resigned as an employee of Dhissom plc. Thecompany had employed her as pastry chef since 2001. On 1stJanuary 2017, Imogen was nowself-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 isavailable for the tax year 2016/17.Employment1.During the period 6thApril 2016 to 31stDecember 2016 Imogen’s total gross salary fromher 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 theperiod from 6thApril 2016 to 31stDecember 2016 as an employee of Dhissom plc . Shereceived 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 suppliers750Travel from home to a seconded temporary workplace for twomonths3,800Private travel5,680Total miles15,0003.On 1st October 2016, Dhissom plc paid £13,000 towards Imogen’s removal expenseswhen she permanently relocates to Taunton, to work in a restaurant owned by Dhissomplc.4.Imogen contributed 6% of her gross salary of £57,000 into Dhissom plc’s HMRCapproved 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 expensesnote 24,200Property expensesnote 319,200Allowable expenses76,050(104,700)Net profit87,6002.Imogen purchased her Indian restaurant on 1stJanuary 2017.3.She lives in an apartment that is situated above the restaurant and 25% of the totalproperty expenses of £19,200 relate to this apartment.4.On 1stJanuary 2017, Imogen purchased a motor car with CO2emissions of 125 g/km for£16,667 and cooking equipment for £5,400.5.During the period 1stJanuary to 30thSeptember 2017, Imogen drove a total of 6,000miles, of which 1,500 miles were for visiting her mother who lived in Exeter. You canassume 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 anddividends of £10,500.Additional Information1.Imogen contributed £1,600 into a personal pension scheme during the period 1stJanuary2017 to 5thApril 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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