Finance Assignment: Taxable Income Calculation and Tax Liability

This assignment solution provides a detailed calculation of taxable income for the 2019/20 tax year. It includes calculations for Keir's employment income, considering salary, bonus, car allowance, and other benefits like a holiday cottage. The solution also addresses the implications of a fuel card covering both business and personal expenses. Furthermore, it calculates Class 1 and Class 1A National Insurance contributions. The assignment then moves on to calculating Donal's total income, considering NSI employment income, rental income, building society interest, dividends, and betting account profits, while also deducting personal allowances and calculating rental income profits, balance of payment and the due date to pay the income tax liability. Desklib offers a wide range of solved assignments and past papers for students.

Question 1
a. Calculation of Keir's Taxable employment income for the 2019/20 tax
year
Particulars Amount
Salary (60000 * 3/12) + (90000 * 9 / 12) 82500
Bonus* 10000
allowance for own car 6000 * 0.45 = 2700, 3100 - 2700 = 400 400
Skoda 13775
Volswagon 14000
Allowance for car used for business purpose (1280*60%) 768
Holiday cottage 460
Other benefits 9170
Total employment income 131073
Workings
for Skoda (from 6 April 2019 to 5 October 2019 = 6 months)
list price 38500
Operational extras 9000
47500
CO2 (23% + (124 - 95) / 5) = 29% 29%
Benefit in kind 13775
Volswagon
List price 56000
CO2 (23% + (106-95) /5) 25%
Benefit in kind 14000
Holiday cottage
Cottage bill 100
Dinner expense 360
Total 460
other benefits

Premium 800
Phone call cost 120
Occupational pension scheme (60000 * 10% * 3 / 12 + 90000 * 10% *
9/12) 8250
Total other benefits 9170
(b)
Keir is receiving a fuel card that cover te cost of business as well personal expenses.
The card offer the complete reimbursement over the business and personal mileage. The Keir
spent the total of 1280 that is completely refundable due to this card. This will provide an
advantage to the Keir in order to get a refund of the mileage expenses incurred. This card will
allow the Keir to get a deduction in the income tax liability payable of the respective time.
The fuel expenses are almost equal of the Keir in context to its personal as well professional
use of the business. This card will provide a suitable advantage to the Keir in context to
provide an income tax deduction for the cost of fuel bear by the individual. The advantage of
this card make it cost efficient as the indirect benefits in the form of income tax deduction
will be admissible.
( C )
Class 1
15728.76
Class 1 (A)
18088.07
Working
Class 1
= 131073 * 12%
Class 1 (A)
= 131073 * 13.8%

Question 2
(I)
a. NSI SI DIVS
Employment income (75000 - 6%) 70500
Rental income 20610
Building society interest 5000
ISA interest Exempt
Dividends from UK quoted shares 4200
Betting account profit 4200
Total income 95310 5000 4200
Less: Allowable Deductions (n/a unquoted
shares) NA NA NA
Net income 95310 5000 4200
Less: Personal allowance 12500
Taxable income 82810 5000 4200
Working
Rental income
Rent (45 weeks * 800) 36000
Expenses
Insurance charges = (1500 / 12 * 2) + (1800 / 12
* 10) 1750
Carpet Installation 6000
Work done on building (1800 * 80%) 1440
Mortgage interest 6200
Rental Profit 2019/20 20610
2
personal allowances

ANI
Net income -
12500
104510 - 12500 = 92010
(ii)
Balance of payment
Rental 2400
Premium 150
Routine repaid 360
Total 2910
Working
Rental = 800 * 3
Premium = 1800 / 12
Routine repaid = 1800 * 20%
Total = 2910
(III)
The due date to pay the income tax liability is 31st January. Donal is require to payment on
31st of January of the tax liability of previous financial year.