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UNIVERSITY OF TECHNICAL EDUCATION BTEC HND IN BUSINESS (MANAGEMENT

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ASSIGNMENT COVER SHEET
NAME OF STUDENT REGISTRATION NO. UNIT TITLE Unit Code ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR Issue date SUBMISSION DEADLINE Class: 11BM Unit 12: Taxation Y/601/0904 Tax Environment and Personal Tax Liability 1 of 2 Sumit Dhull 4th April 2014 3rd May 2014, 10am

I, __________________________ hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

________________________________ Signature

_________________________ Date

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FOR OFFICIAL USE
Assignment Received By: Date:

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Unit Outcomes
Outcome Evidence for the criteria Feedback Assessor’s decision
First attempt Rework

Internal Verification

Describe the UK tax environment

1.1

Understand the duties and responsibilit ies of the tax practitioner in the UK tax environment LO1

Analyse the role and responsibilities of the tax practitioner

1.2

Explain the tax obligations of tax payers or their agents and the implications of noncompliance Calculate relevant income, expenses and allowances

1.3

2.1

Be able to calculate personal tax liabilities for individuals and partnerships LO2

Calculate taxable amounts and tax payable for employed and self-employed individuals and payment dates

2.2

Complete relevant documentation and tax returns

2.3

Merit grades awarded Distinction grades awarded

M1 D1

M2 D2

M3 D3

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Outcome

Evidence for the criteria

Feedback

Assessor’s decision

Internal Verification

Assignment
( ) Well-structured; Reference is done properly / should be done (if any) Overall, you’ve

Areas for improvement:

ASSESSOR SIGNATURE

DATE

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/

NAME: .........................................................................................

(Oral feedback was also provided) STUDENT SIGNATURE NAME : ...............................................................................
FOR INTERNAL USE ONLY VERIFIED YES NO DATE NAME : ........................................................................... : ...........................................................................

DATE

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/

VERIFIED BY : ...........................................................................

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SCENARIO Recently you joined Accounting and Taxation Consultancy Company and going to have a meeting with a new client who has received correspondence from HM Revenue & Customs to declare his income earned from employment and selfemployment. At the first meeting client explained what he read and hear about income systems and procedures. Your firm specialises taxation advices for private clients such as personal tax, to inheritance tax, capital gains tax and international tax advice etc. giving your client the detailed insight need to make effective taxation decisions. At the meeting client also requested to complete and submit his tax return forms as early as possible and he does not clearly understand the authority requirements. Now you are assisting the clients and prepare various documents as per authority requirements. You are required to carry out the following tasks:

• • •

Describe the UK tax environment Analyse the role and responsibilities of the tax practitioner

(1.1) (1.2)

Explain the tax obligations of tax payers or their agents and the implications of non-compliance (1.3)

Personal Tax Liability - Johnson A client of your firm, Johnson, aged 60, works full-time as a director of a large manufacturing company, Gemini Furniture Ltd. This company is a close company and Mr Johnson owns 5% of the ordinary share capital. He has provided you with the following information to allow you to complete his Tax Return for the year to 5 April 2013. His salary (before any bonuses) from Super Furniture Ltd was £250,000 with PAYE of £82,500 deducted. He also received an interest-free loan from the company on 1 October 2010 of £50,000, to fund an extension to his home. This loan was still outstanding on 5 April 2013. Mr Johnson is entitled to a bonus, based on the profit of Gemini Furniture Ltd, for the year ending 31 December 2011. At the company board meeting, on 1 March 2012, this bonus was agreed at £20,000 and was paid with his May 2012 salary on 31 May 2012.

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Several years ago he purchased 100 shares in Gemini Furniture Ltd for £25,000, financed entirely by a bank loan. During 2012/13 he paid interest of £1,250 on this loan and the capital balance remained unchanged. Interest was paid monthly on the sixth of every month. On 5 March 2013, he sold 25 shares in Gemini Furniture Ltd for £10,000 and used the proceeds of the sale to purchase a new car. He made no other capital disposals during the year. Mr Johnson began to make annual contributions, to a personal pension policy in 2009. His gross contributions have been as follows: £ 31 January 2009 65,000 31 January 2010 44,000 31 January 2011 49,000 31 January 2012 54,000 31 January 2013 56,000 He subscribed £100,000 for shares in Super Times Ltd, a qualifying venture capital trust, on 1 May 2012. He also made a qualifying gift aid donation of £5,000. During 2012/13, he received net interest of £5,000 from his building society account and gross interest of £3,000 from UK government gilts. He also received net dividend income of £12,600 from Gemini Furniture Ltd and £500 from Supper Times Ltd. Mr Johnson and his wife Mrs Johnson jointly own part of a river adjacent to their house and they sell fishing rights, on the river, to local anglers. They received income of £5,500 from this during 2012/13. In addition to this, a few years ago they converted a garage next to their home which they now let as furnished holiday accommodation. This property was let for 250 days during the tax year and rental income of £20,000 arose. Allowable expenses from the holiday business during the year amounted to £7,000. Mr and Mrs Johnson also own a buy to let property which is let to tenants fully furnished, on a short assured tenancy. The rental income from this amounted to £8,000 in 2012/13. The expenses incurred in relation to this property were mortgage interest payments of £5,000, purchase of a new dishwasher for £600 and repairs to the cooker of £550. Mr and Mrs Johnson have elected to claim the wear and tear allowance. Mrs Johnson’s only other sources of income during 2012/13 were a salary of £15,000 from her job as a part-time teacher and child benefit payments of £20.30 per week. Mrs Johnson runs the rental businesses alone.

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Mr Johnson is resident, ordinarily resident and domiciled in the UK. Partnership -

You are required to compile the following: • • Calculate relevant income, expenses and allowances (2.1)

Calculate taxable amounts and tax payable for employed and self-employed individuals and payment dates (2.2)
Hints: You are required to calculate Mr Johnson’s 2012/13 tax payable or repayable, showing full workings. You should assume that any opportunities for claiming reliefs or deferring any tax payable are taken.

Complete relevant documentation and tax returns

(2.3)

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GRADING Pass is achieved by meeting all the requirements defined in the assessment criteria. (Refer page 2 of the assignment brief) Identify and apply strategies to find appropriate solutions. (M1)

Merit

Characteristics / Possible Evidence – demonstrate relevant theories and techniques have applied such tax computations for individuals and self-employed and calculate personal tax liabilities for individual as well as self-employed. Select/design and apply appropriate methods/techniques (M2)

Characteristics / Possible Evidence – a range of methods and techniques have been used for tax computations, tax returns and allowances for individual and self-employed. Present and communicate appropriate findings (M3)

Characteristics / Possible Evidence – an appropriate structure and approach have been used to compile tax computation and used a range of presentation methods like tables, forms and charts. Distinction Use critical reflection to evaluate own work and justify valid conclusions (D1) Characteristics / Possible Evidence – synthesis used to generate tax computation for individual and self-employed as well as justify valid conclusions on tax payable and payment dates for client. Take responsibility for managing and organizing activities (D2)

Characteristics / Possible Evidence – demonstrated substantial activities have been planned, managed and organized as well as interdependence are recognized to calculate the personal tax payable by clients.

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PRESENTATION 1. The assignment should have a cover page that includes the assignment title, assignment number, course title, module title, Lecturer/tutor name and student’s name. Attach all the pages of assignment brief/cover sheet with your report and leave them blank for official use. 2. Ensure that authenticity declaration has been signed. 3. This is an individual assignment. 4. Content sheet with a list of all headings and page numbers. 5. A fully typed up professionally presented report document. Use 12 point Arial or Times New Roman script. 6. Your assignment should be word-processed and should not exceed 2,500 words in length. A CD should be included with references and accompanying notes. 7. Use the Harvard referencing system. 8. Exhibits/appendices are outside this limit. 9. The assignment should contain a list of any references used in the report. NOTES TO STUDENTS FOR SUMMISSION • • • • • • • • Check carefully the submission date and the instructions given with the assignment. Late assignments will not be accepted. Ensure that you give yourself enough time to complete the assignment by the due date. Do not leave things such as printing to the last minute – excuses of this nature will not be accepted for failure to hand-in the work on time. You must take responsibility for managing your own time effectively. If you are unable to hand in your assignment on time and have valid reasons such as illness, you may apply (in writing) for an extension. Failure to achieve a PASS grade will results in a REFERRAL grade being given. Take great care that if you use other people’s work or ideas in your assignment, you properly reference them in your text and any bibliography. NOTE: If you are caught plagiarizing, the University policy and procedures will apply.

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