Q31

if Sarah incorporates her business on 6 April 2019

No-sav Div
Employment income 30000
Dividend 10000
Total income/ net income 30000 10000
(-) PA -12500
Taxable income 17500 10000

IT lia
Non-saving
17500*20% 3500
Div
2000*0% 0
8000*7.5% 600
4100

NIC
Class1 NIC by sarah 2564
Class1 NIC by limited company 2949

Taxable total profits before remuneration 50000

(-) D remu -30000
(-) Class 1 NIC by company -2949
17051
CT 3240

Total Tax if incorporated 12853

Overall tax will increase by 1630

Q32
(a)
Employment income
Salary 23700
Taxable benefit
Accomodation benefi 6300
Asset benefit (furnitu 1880
Loan benefit 700 8880
Taxable employment income 32580

Working1
Accomodation Benefit
Annual value 4600
Additional benefit
(MV143000-75000)*2.5% 1700
6300

tax adjusted trading profit for the four-month p/e 30 April 2020 29700
(-) CA (w2) -300
29400

Sharing profit Art Simon

Trading profit (1 Jan 2020 to 30 29400
(-) Partners salary -2000 2000
27400
(-) Sharing ratio -27400 16440 10960
18440 10960

Working 2
CA(1 Jan 2020to 30 April 2020)
Private useCA
Add-Car CO2 125g/k 25000
(-)WDA 6%*4/12 -500 300
TWDV c/f\ 24500

Basis Period Assessment

Tax Year Basis period Amount
2019/20 1 Jan 2020 to 5 April 8220

Property income
Rental income 7920
(-) Expense Council Tax and wate -1320
(-) Replacement of washer dryer -660
Taxable property income 5940

Non-saving
Employment income 32580
Partnership's trading profit 8220
Property income 5940
Total income/Net income 46740
(-) PA -12500
Taxable income 34240

(b)
It give maximum interval from earning profits to payment due date.
It also help tax payer to implement best tax planning and tax avoidance.

1-Jan
1-Jan-20 30 Arpil 2020 30-Apr-21
5-Apr-20 31-Dec-20 5-Apr-21

5-Apr-21 31-Jan-22 2021/22 1 May 2020 to 30 April 2021

10 months
Payment due date 31-Jan-23
21 months
 30 Apirl 2022
5-Apr-22

0 to 30 April 2021 xxx

30-Sep-18 30-Jun-19 30-Sep-19 31-Mar-20 30-Jun-20

2%
5%

First installment Tax point = 1 Mar 2020 800

Invoice iss Payment rec Basis
1-Mar-20 31-Mar-20 15-Apr-20

Second installment6 Tax point = 1 Mar 2020 800

Invoice issued Basis Pay rec

1-Mar-20 15-Apr-20 30-Apr-20

3480
31-Mar-21
Q33(a)
Corrected version of Naive Ltd's corporation tax computation for the year ended 31 March 2020

Operating profit before interest and Tax 274530

Depreciation 15740
Donations to political parties 400
Qualifying charitable donations 900
Accountancy 0
Legal fees in connection with the 0
Entertaining suppliers 3600
Entertaining employees 0
Gifts to customers (pens costing 0
Gifts to customers (food hampers 1650 22290
Capital allowances -48114
Adjusted Trading profit for tax purpose 248706

Working 1
CA (y/e 31 Mar 2020)
AIA Main Pool SRP CA
TWDV b/f 12400 13600
Add-Qualified for AIA
Machinery 42,300
(-) AIA -42300 42300
Add- Not Qualified for AIA and FYA
Motor Car 1 13800
Motor Car 2 14000
(-) Disposal -9300
26200 18300
(-) WDA 18% -4716 4716
(-) WDA 6% -1098 1098
21484 17202
Maxi CA 48114

Trading profit 248706

Int income from Non-trade loan r 32800
Total profits 281506
(-) QCD -900
Taxable Total Profits 280606

CT 53315

Revised CT liability = 53315

Q26 43000

Gift
Delroy's disposal
MV 240000
(-) Cost -25000
Gain 215000
(-) hold over relif -215000
Imme C Gain 0

Grant Base Cost

MV-Holdover
25000

Grant 's disposal

SP 240000
(-) Cost -25000
Gain 215000
(-)AE 0
Taxable Gai 215000
CGT 43000

SP 497000
(-) Cost -152600
Gain 344400
(-) PPR Relief (2/3) -229600
Chargeable Gain 114800 57400 57400
AE -12000 -12000 -12000
102800 28784 57400 45400 45400 45400
Tax Save 12712 6750
Alvita AE 12000*28% 3360 2212
Basis rate 37500*(28%-18%) 3750 21674
7110 7110

28-Mar-20 2019/20 31-Jan-21

6-Apr-20 2020/21 31-Jan-22
Q21 656000

Chargeable Estate 950000

Nil Rate Band 105000

20-Mar-13 7-Nov-19 20-Mar-20

220000
20-Mar-20 20-Mar-27
IHT
105000*0% Nil Rate Band = 325000
338000 88000

Quarterly
Large => Not if CT < or equal 10000 133000
=> Not if TTP < or equal 10 million and not large previous <1000000 Large

Augmented profit // Profit threshold

A 700000 > 375000 Large Quarterly

B 600000 > 500000 Large Quarterly

C 1600000 > 1500000 Large Not

2400
1060
3460

2019/20 2020/21
98800 44100
-12000 -12000
86800 32100

1060 1060
15240 4300

16300 5360 21660

3460
 114000 304000
< 10 mill Large <10 mill not large