F 6 Practive Q

Income Tax – Individuals EXAMPLE 1 Jane earns £32,000 Tax adjusted trading pro_ t in 2008/09, receives bank interest of £4,000 and dividend income of £5,400. In addition she pays £800 to charity under the Gift aid scheme Calculate Jane’s income tax payable for 2008/09 PAPER F6 _ REVISION QUESTIONS

EXAMPLE 2 Recalculate Jane’s income tax payable if her tax adjusted trading pro_ t income was only £8,000

EXAMPLE 3 Anne was born on 18th September 1940 and has Net Income of £24,000 Determine the personal age allowances she is entitled to in 2008/09 Tony and Kathy is a married couple. Tony has employment income of £50,000 and receives rental income of £5,000. Kathy has no income. Discuss how, as a couple, they could reduce the overall tax liability

Property Business EXAMPLE 5 Robert owns two properties. Property A is let out unfurnished at an annual rental of £4,000 from 1 July 2008. Rent is payable quarterly in advance. Expenses amounted to £1,500 for the year to 6 April 2009 on an accruals basis. Property B is let out furnished at an annual rental of £3,000, from 1 August 2008. Rent is payable annually in advance. Expenses amounted to £2,200 for the year to 6 April 2009. In addition, Robert claimed a wear and tear allowance. Determine Robert’s Property Income to be assessed in 2008/09.

EXAMPLE 6 Molly grants a 20-year lease on a shop on 1 August 2008 for a premium of £25,000. The annual rent of £12,000 is payable yearly in advance. Calculate Molly’s Property Income for 2008/09 and the relief available to the tenant for the premium paid.

EXAMPLE 7 Ben rented a furnished property to students at a monthly rental of £1,000 until 31 July 2008. The property was redecorated in August and let again from 1 September 2008 for £1,200 per month. Details of expenditure during 2008/09 Redecoration 2,010 Water rates 150 New washing machine 250 Gardening 520 Legal fee for tenancy agreement 75 Mortgage interest 3,700 Insurance 305 On 1 May 2008 he acquired another furnished property. He paid service charges of £25 per month and mortgage interest of £500 per month. The property was let from 1 August 2008 at a monthly rent of £600. (a) Calculate Ben’s Property Income for 2008/09 (b) What difference would it have made if the second property was classed as a Furnished Holiday letting property.

EXAMPLE 8 Jimmy rents a room in his main residence to Kenny. Jimmy receives rental income of £4,750 and incurs relevant expenses of £300 in 2008/09 Calculate Jimmy’s Property Income assuming all elections are claimed for 2008/09

EXAMPLE 9 Kerry’s net pro_ t for the year ended 31 December 2008 was £30,000 included the following: £ Expenses: Proprietor’s wages 10,000 Depreciation 2 800 Contribution to Political Party 76 Purchase of van for business 20,000 Fines for inadequate fencing of equipment 750 Legal fees for acquisition of a 21 year lease 600 Donation to National Charity 100 Entertaining customers 300 Car Expenses 1,200 Income: Income from furnished lettings (net of Expenses) 1,800 Bank deposit interest (net) 500 Dividends (net) 4,200 Kerry took goods from the business for her own use, with a cost of £280 and selling price £400. Kerry paid the business £280 for the goods. Kerry can show that her business use of the car is 80%.

Calculate the adjusted pro_ t for year ended 31 December 2008

Unincorporated Business EXAMPLE 10 Debra, a sole trader, prepares accounts to 31 December. The WDVs for capital allowances purposes, as at 31/12/07 were as follows: £ General pool 30,000 Expensive car (private use 20%) 15,000 During the year ended 31/12/08 the following transactions occurred: £ 1 January purchased plant 40,000 3 March purchased car 11,000 10 March purchased low emission car 18,000 18 April bought printing press 4,000 6 May sold plant 2,000 10 June sold expensive car 16,000 12 December purchased a long life asset 110,000 The printing press is to be treated as a short-life asset. All assets sold were disposed of for less than cost. Calculate the capital allowances for the year ended 31 December 2008.

EXAMPLE 11 Elliot bought a new industrial building on 1 January 2009, incurring the following costs: £ Land 40,000 Building 200,000 O_ ces 50,000 He brought the building into industrial use immediately and continued to use it for industrial purposes until its date of sale on 1 January 2011. Elliot sold the building for £230,000 (including £50,000 for the land and £35,000 for the o_ ces). Calculate the allowances given to Elliot. (He prepares accounts to 31 March.)

EXAMPLE 12 Felix, a scienti_ c instrument manufacturer, makes up annual accounts to 31 March. He bought a new industrial building on 1 July 2008 and bought it into use straight away. The building cost £400,000 and was used for industrial purposes until 30 June 2009. The factory was used for non-industrial purposes for the period 1 July 2009 to 30 September 2010. On 1 October 2010 the factory was again in industrial use and continued to be so until its sale on 30 June 2011 for £475,000 to Terry.

Calculate the allowances available to Felix for all relevant periods of account.

EXAMPLE 13 James prepares accounts to 30 September annually. His Trading Income for the two years to 30 September 2008 were: £ Year to 30 September 2007 17,000 Year to 30 September 2008 19,000 Show the assessments for 2007/08 and 2008/09 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

13

Income Tax - Unincorporated Business

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EXAMPLE 14 Adam commenced trading on 1 July 2006. He prepared accounts to 30 June each year. His trading income for the _ rst two years were as follows: £ Year ended 30/6/07 36,000 Year ended 30/6/08 42,000 Show the assessments for all relevant years. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

14

Income Tax - Unincorporated Business

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EXAMPLE 15

Emily commenced trading on 1 July 2006. She prepared accounts to 31 March 2008 and annually thereafter. Her trading income for the _ rst two accounting periods were as follows: £ 21 months ended 31 March 2008 63,000 Year ended 31 March 2009 40,000 Show the assessments for all relevant years. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

15

Income Tax - Unincorporated Business

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EXAMPLE 16 Patricia commenced trading on 1 September 2006. She prepared accounts to 30 June 2007 and annually thereafter. Her Trading Income for the _ rst two periods were as follows: £

10 months ended 30 June 2007 40,000 Year ended 30 June 2008 54,000 Show the assessments for all relevant years. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

16

Income Tax - Unincorporated Business

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EXAMPLE 17 Jacqui commenced trading on 1 July 2006. She prepared accounts to 30 April 2008 and annually thereafter. Her Trading Income for the _ rst two periods were as follows: £ 22 months ended 30/4/08 66,000 Year ended 30/4/09 30,000 Show the assessments for all relevant years. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

17

Income Tax - Unincorporated Business

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EXAMPLE 18

Matthew commenced trading on 1 May 1999. After trading pro_ tably for some years, he ceased trading on 31 March 2009. His Trading Income for the _ nal three periods is as follows: £ Year ended 30/4/2007 37,000 Year ended 30/4/2008 40,000 Period ended 31/3/2009 36,000 Assume his overlap pro_ ts (for the period 1/5/99 - 5/4/00) were £25,000. Show the assessments for all relevant years.

EXAMPLE 19 Anne decides to change her accounting date from 31 March to 30 June making up accounts for the three month period to 30 June 2007. Anne’s trading income is as follows: £ Year ended 31 March 2007 72,000 Three months to 30 June 2007 16,000 Year ended 30 June 2008 90,000 Show the assessments for all relevant years. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

19

Income Tax - Unincorporated Business

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EXAMPLE 20

Tony, a sole trader, commenced trading on 1 July 2004. He has now decided to change his accounting date to 30 September by making up accounts for the 15-month period to 30 September 2007. Tony’s trading income is as follows: £ Year ended 30 June 2005 27,000 Year ended 30 June 2006 36,000 Period ended 30 September 2007 45,000 Year ended 30 September 2008 54,000 Show the assessments for all relevant years. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

20

Income Tax - Unincorporated Business

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EXAMPLE 21 Mike started trading on 1 November 2006. His trading results before deducting capital allowances were as follows: 8 months ended 30 June 2007 36,000 Year ended 30 June 2008 44,000 He bought a car on 9 November 2006 for £15,000 for the sole use of his salesman. Calculate his Trading Income assessable amounts for 2006/07, 2007/08 and 2008/09. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

21

Income Tax - Unincorporated Business

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EXAMPLE 22

Barbara makes up accounts to 31 March each year. For the year ended 31 March 2009 she incurred a trading loss of £10,000. Determine in which years Barbara may claim loss relief under S64? PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

22

Income Tax - Unincorporated Business

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EXAMPLE 23 Ken gave up his job with an orchestra, and started his own musical business on 1 November 2005. His results are as follows: Year ended £ 31/10/06 loss (50,000) 31/10/07 pro_ t 20,000 31/10/08 pro_ t 15,000 31/10/09 pro_ t (estimated) 27,000 Ken’s only income was employment income as follows:

Up to and including 2004/05 £60,000 p.a. 2005/06 (7 months) £35,000 (a) Show how the loss would be relieved under s64, s72 and s83. (b) Which would be the most bene_ cial way for Ken to relieve the loss? PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

23

Income Tax - Unincorporated Business

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EXAMPLE 24 Bill and Ben share pro_ ts equally up to 31 October 2008 but in the ratio 2:1 thereafter. Their adjusted trading pro_ ts for the year to 31 December 2008 are £48,000. Show the allocation of the trading pro_ t to both partners in 2008/09 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

24

Income Tax - Unincorporated Business

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EXAMPLE 25

Tracy and Donna are in partnership sharing pro_ ts equally. On 31 December 2007 Donna retired. Ethel was admitted to the partnership on 1 January 2008 and was entitled to one third of the pro_ ts. The trading income for the years to 30 June 2007, 2008 and 2009 are £40,000, £54,000 and £60,000. Donna has overlap pro_ ts brought forward of £15,000. Show the Trading Income assessable for 2007/08 and 2008/09 for all partners. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

25

Income Tax - Unincorporated Business

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EXAMPLE 26 Gordon has the following income and gains: 2007/08 2008/09 ££ Total income 6,000 7,000 Capital gains 20,000 16,000 He incurred a trading loss of £50,000 in his year ended 31 December 2008. Show Gordon’s taxable income and chargeable gains for 2007/08 and 2008/09 assuming that he relieves his trading loss as early as possible. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

26

Income Tax - Employee Bene_ ts

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EXAMPLE 27

Thomas earns £40,000 per annum. He is provided by his employer with a _ at close to the o_ ce. Its annual value is £4,100. The _ at was purchased in 2002 for £250,000 and was _ rst made available to Thomas in January 2004 when it was worth £280,000. The employer paid heating bills of £580 in 2008/09. The furnishings in the house cost £20,000. Assume an o_ cial rate of interest of 6.25%. Calculate Thomas’s bene_ t in respect of the provision of the accommodation and associated expenses. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

27

Income Tax - Employee Bene_ ts

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EXAMPLE 28 Clare earns £20,000 p.a. and is provided with a petrol Volvo T5 by her employer. The car, which was purchased in January 2004, had a list price of £30,000. The car was _ rst made available to Clare on 1 July 2008. The car has an o_ cial CO2 emission rate of 193 grams per kilometre. In the year 2008/09 she drove 16,000 miles, of which 2,000 were private. Clare contributes £20 per month to her employer for the private use of the car. Calculate Clare’s bene_ t in respect of the company car. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

28

Income Tax - Employee Bene_ ts

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EXAMPLE 29

Mike was _ rst provided with a CD player for his private use on 6 April 2007. It had a market value of £6,000. His employer transferred the CD player to Mike on 6 April 2008, when it was worth £4,200. Mike was required by his employer to pay £500. Calculate Mike’s bene_ t for 2007/08 and 2008/09. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

29

Individuals - Pensions

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EXAMPLE 30 Tony is self-employed His Trading Income assessable amount for 2008/09 is £20,000. You are required to calculate the maximum pension contribution he could obtain relief for in 2008/09. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

30

Individuals Capital Gains Tax

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EXAMPLE 31

Gill sold a factory used in her trade in November 2008 for £140,000. She had bought it in January 1988 for £60,000. The disposal was not part of the sale of the entire business. Gill made one other disposal in 2008/09 realising a loss of £4,500. Calculate Gill’s capital gains tax payable for 2008/09. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

31

Individuals Capital Gains Tax

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EXAMPLE 32 Frederick bought an Antique vase costing £3,000 in July 1997 and sold it in February 2008 for £4,500 James bought a painting costing £2,000 in September 1999 and sold it September 2008 for £7,500 Sam bought a rare manuscript in July 1993 for £10,000 and sold it in August 2008 for £3,000 Calculate the capital gains or capital loss arising for each individual. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

32

Individuals Capital Gains Tax

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EXAMPLE 33

Billy bought a set of ten terracotta warriors in March 1997 for £20,000. He sold 2 warriors in July 2008 for £6,000. The remaining 8 warriors were worth £28,000 in July 2008. Calculate the Capital Gain in 2008/09 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

33

Individuals Capital Gains Tax

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EXAMPLE 34 Simon purchased an o_ ce block as an investment for £500,000 in April 2002. In September 2008 it was damaged by _ re. Restoration Expenditure of £70,000 was incurred in February 2009 and Simon received insurance money of £60,000 in June 2009. The o_ ce block was worth £1,000,000 after the damage. Assume Simon elects to deduct the proceeds of insurance against the cost of the building when the restored asset is sold.

Calculate the Capital gain arising (if any) in June 2009 and the base cost of the asset on a subsequent disposal. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

34

Individuals Capital Gains Tax

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EXAMPLE 35 Betty purchased an asset for £25,000 on 1 October 1991 which was destroyed by _ re on 30 September 2008. She received compensation of £36,000 from her insurance company on 1 January 2009 and purchased a replacement asset for £34,000 on 1 February 2009. Calculate the Capital Gain arising on 1 January 2009 and the base cost of the replacement asset. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

35

Individuals Capital Gains Tax

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EXAMPLE 36

Nancy owns 5,000 shares in Horwick plc, a quoted company. They were acquired in June 2005 and September 2007 for a total cost of £18,000. Nancy sells 2,000 of the shares in December 2008 for £36,000. Nancy is not an employee of Horwick plc. Compute the Capital Gain arising on the sale of the shares in December 2008 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

36

Individuals Capital Gains Tax

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EXAMPLE 37 Rebecca bought shares in Surpass plc as follows: Shares 6/10/89 800 1/12/92 1,000 1/8/01 500 11/11/08 1,800 On 1 June 1995 there was a bonus issue of 1:4. On 1 November 2008 she sold 3,550 shares. Identify the shares Rebecca has disposed of using the individual share matching rules. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

37

Individuals Capital Gains Tax

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EXAMPLE 38

Kit sold her unincorporated business on 31 October 2008 which she had owned for the previous 10 years, giving rise to the following capital Gains and capital Losses £ Freehold factory 200,000 Warehouse (150,000) Goodwill 350,000 Investment property 120,000 She also disposed of shares in Planet Limited in June 2008, (a company in which she owned an 8% holding and was a part time employee for the last 5 years), giving rise to a capital gain of £700,000 Kit had capital losses brought forward of £20,000. Calculate Kits Capital Gains Tax Liability and state the due date for payment. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

38

Individuals Capital Gains Tax

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EXAMPLE 39 Chloe, a trader, disposed of land used in her business for £750,000 in March 2009. The land had cost her £100,000 in June 1988. The sale was not part of the disposal of the entire business. She purchased goodwill (as part of the purchase of another unincorporated business), for trading use, in November 2009 for £700,000. Calculate the chargeable gain on the disposal of the land and the base cost of the goodwill. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

39

Individuals Capital Gains Tax

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EXAMPLE 40

Peter sold a business asset to Kris in October 2008 for £40,000 when its market value was £75,000. The asset had cost Peter £25,000 in March 1990. Gift relief is claimed. Calculate Peter’s chargeable Gain and the base cost of the asset for Kris. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

40

Individuals Capital Gains Tax

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EXAMPLE 41

Jacqui bought a house in Manchester on 6 July 1989. She lived in it until 6 July 1994. She then took a job in Birmingham living in accommodation provided by her employer, and let out the house in Manchester. She left the job on 6 January 2004 and travelled for 2 years, returning to the house in Manchester on 6 January 2006. The house was empty during this period. She sold the house on 6 July 2008, making a capital gain of £190,000. Calculate the chargeable gain after all relevant reliefs PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

41

Corporation Tax

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EXAMPLE 42 In the year to 31 March 2009 Cannock plc received and (paid) the following amounts: £ Trading Income 280,000 Bank interest (accrued) 20,000 Debenture interest (accrued) 30,000 Dividends received (net) 4,500 Gift Aid payment (1,000) Dividends paid (net) (80,000) Calculate corporation tax payable by Cannock plc. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

42

Corporation Tax

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EXAMPLE 43

Westcroft Ltd, a small company which manufactures greetings cards, prepares accounts to 31 December. The WDVs for capital allowances purposes, as at 31/12/07 were as follows: £ General pool 30,000 Expensive car (private use by director 20%) 15,000 During the year ended 31/12/08 the following transactions occurred: £ 1 January purchased plant 40,000 3 March purchased car 11,000 10 March purchased low emissions 18,000 6 May sold plant 2,000 10 June sold Expensive car 16,000 18 September bought printing press 4,000 12 December purchased a long life asset 110,000 The printing press is to be treated as a short-life asset. All disposals were for less than cost. Calculate capital allowances for the accounting period ended 31 December 2008.

PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

43

Corporation Tax

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EXAMPLE 44 Fallings Ltd’s pro_ t before tax for the year ended 31 December 2008 was £90,000 included the following: £ Expenses: Director’s salary 42,000 Depreciation 2,800 Gift Aid donation to charity 180 Purchase of van for business 20,000 Fines for inadequate fencing of equipment 750 Legal fees for acquisition of a 21- year lease 600 Amortisation of lease (cost £42,000) 2,000 Christmas party for sta_ 480 Entertaining customers 300 Expenses of car used by a director 1,200 Political donation to the Green Party 100 Income: Income from furnished lettings (net of Expenses) 1,800 Bank deposit interest 500 Dividends (net) 4,200 A director took goods from the business for her own use, with a cost of £280 and selling price £400. The director’s loan account was debited with the £280 cost. The director with a company car can show that her business use of the car is 80%. Calculate the adjusted pro_ t for the year ended 31 December 2008. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

44

Corporation Tax

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EXAMPLE 45

Skip plc had the following income and expenditure for the year ended 31 March 2009. £ Adjusted trading pro_ ts 500,000 Capital allowances 20,000 Building society interest – amount received in the year 30,000 – amount accrued for the year 24,000 Debenture interest – amount received in the year 25,000 – amount accrued for the year 28,500 Gift Aid – amount paid 1,800 Calculate the pro_ ts chargeable to corporation tax for year ended 31 March 2009. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

45

Corporation Tax

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EXAMPLE 46

Bugs Bunny Ltd sold a factory used in its trade in November 2008 for £140,000. The company had bought it in January 1989 for £60,000. Assume that the indexation factor for the period January 1988 to November 2008 is 0.851. The company made one other disposal in its year to 31 March 2009 realising a loss of £4,500. Calculate the Net chargeable Gains arising on the disposal of the two assets. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

46

Corporation Tax

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EXAMPLE 47 ST Limited sold 5,000 shares in JM Ltd for £50,000 on 12 January 2009. They had been acquired as follows: February 1992 1,000 shares costing £1,500 January 1994 1:4 Bonus issue July 1997 2,000 shares costing £4,000 February 2002 1:5 Rights issue at £1.75 per share January 4th 2009 2,000 shares costing £4,500 Calculate the chargeable gain to include in the Corporation tax computation. RPI’s are: Feb 1992 136.3 Jan 1994 141.3 July 1997 157.5 Feb 2002 173.8 Jan 2009 212.6 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

47

Corporation Tax

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EXAMPLE 48

Daisy Ltd, a trading company disposed of a building for £750,000 in March 2009. The building had cost the company £100,000 in June 1990. Assume an indexed rise of 80% to March 2009. Daisy Ltd then purchased land, for trading use, in November 2009 for £700,000. Calculate the chargeable gain on the disposal of the building and the base cost of the land. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

Corporation Tax

48

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EXAMPLE 49

Bolton plc had the following results for the years ending 31 July. 2006 2007 2008 Trading income/(loss) 10,000 (18,000) 42,000 Interest income 2,000 2,000 2,000 Gift aid payment 1,000 1,000 1,000 Show how the loss is relieved, assuming Bolton plc claims loss relief as soon as possible. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

49

Corporation Tax

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EXAMPLE 50 Z Ltd made a loss of £120,000 in the year to 31 December 2008, and T Ltd made a pro_ t of £100,000 in the year to 30 September 2008. Calculate the maximum trading loss that Z Ltd can surrender to T Ltd for use in T Ltd’s accounting period to 30 September 2008 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

50

Corporation Tax

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EXAMPLE 51

J Ltd and K Ltd had the following results: y/e 31/3/08 y/e 31/3/09 ££ J Ltd Trading Income 500,000 200,000 K Ltd Trading Income/(loss) 190,000 (120,000) Calculate the PCTCT for each company in years ended 31 March 2008 and 31 March 2009 assuming the Trading loss in K Ltd is o_ set in the most bene_ cial manner for the group PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

51

Corporation Tax

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EXAMPLE 52 William Ltd has the following income for the year to 31 March 2009: Trading Income £1,500,000 Overseas dividend (amount received) £155,200

The overseas dividend is from an 80% holding in Junkie Inc. Its results for the year ended 31 March 2009 are as follows: £ Trading Income 420,000 Taxation: Corporation tax (123,000) Distributable pro_ ts 297,000 Dividends paid: Net 194,000 Withholding tax at 3% 6,000 200,000 Retained pro_ ts 97,000 The actual foreign corporation tax subsequently paid was £115,000 Calculate the corporation tax for William Ltd for the year ended 31 March 2009 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

52

Income Tax - Self Assessment

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EXAMPLE 53 A taxpayer’s tax liability for 2007/08 was as follows: £ Income tax 9,400 Less: Tax deducted at source (2,100) 7,300 Class 4 NIC 700 CGT 3,500 11,500 Calculate the payments on account for 2008/09 and state the due dates for payment PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

53

Income Tax - Self Assessment

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EXAMPLE 54

Continuing with example above, suppose that the taxpayer’s liability for 2008/09 is as follows: £ Income tax 10,800 Less: Tax deducted at source (2,500) 8,300 Class 4 NIC 800 CGT 4,600 13,700 Calculate the balancing payment due on 31 January 2010 and the _ rst payment on account for 2009/10 PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

Income Tax - PAYE Coding

54

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EXAMPLE 55

Maureen, who is single, is a basic rate taxpayer. She paid a personal pension premium of £1,000 (net) and £120 professional subscription in 2008/09. She received bene_ ts in kind of £320 from her employer. She received untaxed income of £250, the tax liability on which is discharged by set-o_ against allowances. Underpaid tax of £150 from an earlier year is to be collected via her code. Calculate Maureen’s PAYE tax coding notice for 2008/09. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

55

Corporation Tax - Self Assessment

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EXAMPLE 56 Daisy limited has PCTCT of £2 million in year end 31 March 2009 (a) Calculate the corporation tax and the due dates for payment (b) What is the _ ling date? PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

56

VAT

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EXAMPLE 57

YR Ltd commenced trading on 1 June 2008. The value of its taxable supplies were £4,000 per month until 1 April 2009 when they increased to £8,000 per month. When does YR Ltd have to notify HMRC that it needs to register for VAT and when is registration e_ ective? PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

57

VAT

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EXAMPLE 58 Dolphin Ltd commenced trading on 1 June 2008. The value of its taxable supplies was £3,000 per month until 1 April 2009 when the company signed a contract such that monthly sales were expected to be £70,000. When is Dolphin Ltd required to register for VAT and by what date must it notify HMRC? PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

VAT

58

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EXAMPLE 59

In the quarter to the 31 March 2009 ST Limited made a standard rated supplies of £100,000 and zero rated supplies of £50,000. It o_ ered a 3% discount for payment within 28 days. Approximately a third of its customers took up the discount. It made standard rated purchases of £61,250 (VAT inclusive), which included £2,250 for entertaining customers. It made zero rated purchases of £12,000. It wrote o_ bad debts of £7,875 and £5,525 in respect of amounts due 1 July 2008 and 1 January 2009. Both _ gures are VAT inclusive. Purchased a car for the salesman costing £21,250 (including VAT) and machinery costing £11,750 (including VAT) Show the entries to be included on the VAT return for quarter to 31 March 2009. All _ gures are VAT exclusive unless otherwise stated. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

59

VAT

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EXAMPLE 60 BW Ltd has the following sales & purchases in year ended 31 December 2008: Standard rated sales of £70,500 (including VAT) and zero rated sales of £5,000. Standard rated purchases of £11,750 (including VAT) If the relevant _ at rate percentage is 11% for this trade, illustrate if it is advisable to use the _ at rate scheme. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

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VAT

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EXAMPLE 61

Daisy Ltd’s VAT return for quarter to 30 June 2008 was submitted on 15 August 2008 with the payment of VAT £5,000 also on this date. The return and payment for quarter to 30 September 2008 was on time. The next return to 31 December 2008 was on time, but the related VAT payment of £40,000 was only paid on 10 February 2009. Discuss the VAT consequences of the late submission of the VAT returns and/or payments for Daisy Limited. PAPER F6 _ REVISION QUESTIONS June 2009 Examinations

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