FIN5006D
BRITISH TAXATION
Time Constrained Assessment
Date for Submission: Please refer to the timetable on iLearn
(The submission portal on ilearn will close at 12:00 UK time
on the date of submission)
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Assignment Brief
As part of the formal assessment for the programme you are required to submit a
BRITISH TAXATION Time Constrained Assessment (TCA). Please refer to your
Student Handbook for full details of the programme assessment scheme and general
information on preparing and submitting assignments.
Learning Outcomes:
After completing the module, you should be able to:
1.Display a detailed understanding of the scope of the UK tax system
2.Explain and compute chargeable gains and inheritance tax liabilities
3.Understand and explain VAT implication to corporations and individuals
4.Compute Income tax liabilities for individuals and corporations.
5.Produce complex computations reflecting current UK tax legislation
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Guidance
Your assignment should include: a title page containing your student number, the
module name, the submission deadline and the exact word count of your submitted
document; the appendices if relevant; and a reference list in AU Harvard system(s).
You should address all the elements of the assignment task listed below. Please
note that tutors will use the assessment criteria set out below in assessing your work.
You must not include your name in your submission because Arden University
operates anonymous marking, which means that markers should not be aware of the
identity of the student. However, please do not forget to include your STU number.
Maximum word count: NONE
Please refer to the full word count policy which can be found in the Student Policies
section here: Arden University | Regulatory Framework
Please note the following:
Students are required to indicate the exact word count on the title page of the
assessment.
The word count includes everything in the main body of the assessment (including in
text citations and references). The word count excludes numerical data in tables,
figures, diagrams, footnotes, reference list and appendices. ALL other printed
words ARE included in the word count.
Please note that exceeding the word count by over 10% will result in a 10-percentage
point deduction.
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including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Assignment Instructions
Instructions:
This assessment should take you no longer than 4 hours and can be completed
at any point during the 24-hour window. Please ensure you give yourself
adequate time to upload your completed paper to Turnitin.
For further guidance on the TCA assessment please click on this link:
https://vimeo.com/398870288/2283356462
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including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
TAX TABLES
Tax rates & allowances for 2021/22
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
The current rates and allowances for income tax, corporation tax, capital gains tax,
inheritance tax and other taxes are set out below.
Income tax rates***
Non-savings
£0 – £2,000
£0 (or £2,000) – £37,700
£37,701 – £150,000
Over £150,000
Savings
Dividends
0%*
20%
40%
45%
0%**
7.5%**
32.5% **
38.1% **
–*
20%
40%
45%
* 0% rate on savings only available up to £5,000 of savings income if non-savings income
does not exceed this sum. In addition, a £1,000 personal savings allowance is available to
basic rate taxpayers (£500 for higher rate and nil for additional rate taxpayers).
**Dividend allowance of £2,000 (unchanged from 2020/21)
*** These rates apply in England, Wales and Northern Ireland only.
Scottish IT rates: £1–£2,097=19%, £2,098–£12,726=20%, £12,727–£31,092=21%,
£31,093–£150,000=41%, over £150,000=46%
Personal income tax allowances
2021/22 2020/21
£
£
Income tax allowances:
Personal allowance
12,570 12,500
Income limit: personal allowance
100,000 100,000
Transferrable tax allowance (married couples) 1,260
1,250
Income limit: transferable tax allowance
30,400 30,200
Dividend allowance
2,000
2,000
Personal savings allowance:
Basic rate taxpayers
1,000
1,000
Higher rate taxpayers
500
500
Blind person’s allowance
2,520
2,500
Increase
£
70
0
10
200
0
0
0
20
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including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Income tax reliefs and incentives: annual limits
2021/22
£
Individual Savings Account (ISA)
20,000
Junior ISA
9,000
Lifetime ISA
4,000
Child Trust Fund
9,000
Enterprise investment scheme (EIS)
2,000,000
Seed Enterprise investment scheme (SEIS) 100,000
Venture capital trust (VCT)
200,000
Social investment tax relief (SITR)
1,000,000
Pension scheme allowances:
Annual allowance
40,000
Lifetime allowance
1,073,100
2020/21
£
20,000
9,000
4,000
9,000
2,000,000
100,000
200,000
1,000,000
40,000
1,073,100
Approved mileage rates
Cars and vans
Motorcycles
Bicycles
Business Miles
0 – 10,000
10,000+
Allowance rate per mile
45p
25p
24p
20p
Excess payments over these rates are taxable. Shortfalls can be claimed as tax
relief by the employee. If the employee carries another employee in their own
car or van on a business journey, and additional tax-free payment of 5p per
mile applies.
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Car and fuel benefits in kind (round reported CO2 g/km down to find the correct
percentage)
Company car benefit charge (registered before 6 April 2020 – NEDC – non-hybrid):
CO2
g/km
0
1
51
55
60
65
70
75
80
Taxable %
Petrol Diesel
1
14
18
15
19
16
20
17
21
18
22
19
23
20
24
21
25
CO2
g/km
85
90
95
100
105
110
115
120
125
Taxable %
Petrol Diesel
22
26
23
27
24
28
25
29
26
30
27
31
28
32
29
33
30
34
CO2
g/km
130
135
140
145
150
155
160+
Taxable %
Petrol Diesel
31
35
32
36
33
37
34
37
35
37
36
37
37
37
Company car benefit charge (registered after 6 April 2020 – WLTP – non-hybrid):
CO2
g/km
0
1
51
55
60
65
70
75
80
Taxable %
Petrol Diesel
1
13
17
14
18
15
19
16
20
17
21
18
22
19
23
20
24
CO2
g/km
85
90
95
100
105
110
115
120
125
Taxable %
Petrol Diesel
21
25
22
26
23
27
24
28
25
29
26
30
27
31
28
32
29
33
CO2
g/km
130
135
140
145
150
155
160
165+
Taxable %
Petrol Diesel
30
34
31
35
32
36
33
37
34
37
35
37
36
37
37
37
Company car benefit charge (hybrid cars with CO2 <50g/km – otherwise use above):
CO2 g/km
Electric only mileage range Reg < 6/4/20
0
1 to 50
1 to 50
1 to 50
1 to 50
1 to 50
130 +
70 to 129
40 to 69
30 to 39
< 30
1
2
5
8
12
14
Reg > 6/4/20
1
1
4
7
11
13
Note – no Diesel supplement applies if car meets Euro standard 6d (RDE2)
Car fuel benefit charge
Van benefit charge
Zero emissions van benefit charge
Flat rate Van fuel benefit charge
£24,600
£3,500
£0
£669
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
National Insurance Contributions
Item
2021/22
Class 1:
Lower Earnings Limit – LEL (per week)
Primary (employees) Threshold (per week)
Secondary (employers) Threshold (per week)
Upper Earnings Limit – UEL (per week – employees only)
Upper Secondary Threshold
(per week – <21yr old)
(per week – <25yr old apprentices)
Employment allowance (per employer)
Employee’s contributions (£184pw to £967pw +2% over £967pw)
Employer’s Contribution Rates (all earnings over £170pw)
Class 1A and 1B
Class 2: Self-employed Contribution (per week)
Small Profits Threshold (per annum)
Class 3: Contribution (per week) (voluntary)
Class 4: Contributions – Upper Profits Limit
Contributions – Lower Profits Limit
Contribution Rate
(£9,568pa – £50,270pa then 2% over £50,270pa)
2020/21
£120
£184
£170
£967
£120
£183
£169
£962
£967
£967
£4,000
12%
13.8%
13.8%
£3.05
£6,515
£15.40
£50,270
£9,568
9.0%
£962
£962
£4,000
12%
13.8%
13.8%
£3.05
£6,475
£15.30
£50,000
£9,500
9.0%
Capital taxes: Individuals
2021/22 2020/21
£
£
Capital gains tax annual exempt amount
Individuals, etc.
12,300 12,300
Capital gains tax standard basic rate
10%*
10%*
Capital gains tax standard higher rate
20%*
20%*
Business Asset Disposal/
Entrepreneurs’ Relief limit
1 million 1 million
Business Asset Disposal/
Entrepreneurs’ Relief rate
10%
10%
Investors’ Relief limit
10 million 10 million
Investors’ Relief rate
10%
10%
Inheritance tax threshold
325,000 325,000
(each if couple/partner)
Residence nil rate band limit
175,000 175,000
Inheritance tax rate
40%
40%
Lower rate (10%+ of estate left to charity)
36%
36%
Stamp Duty/Stamp Duty Reserve Tax**
0.5%
0.5%
Increase
£/%
0
0
0
0
0
0
0
0
0
0
0
0
* An 8% surcharge applies in respect of residential properties and carried interest
** Duty payable on share purchase over £1,000 only and rounded up to nearest £5
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including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Capital allowances
2021/22 2020/21
Plant and machinery: Main rate
18%
18%
Special rate
6%
6%
Annual investment allowance
£1,000,000* £1,000,000
Structures and Buildings Allowance
3%
3%
* applies to investments made 1.1.19 to 31.12.21 then rate of £200,000 will apply
Corporation tax, allowances and reliefs
2021/22 2020/21
Corporation Tax rate
R&D tax credits SME scheme
R&D SME repayable credit
R&D Expenditure credit
Patent box
Film, High end TV and videogame tax relief
Diverted Profits Tax
Digital Service Tax
Bank Surcharge
Bank levy: 1.1.21 onwards – equity and LT liabs
ST liabs
19%
230%
14.5%
13%
10%
25%
25%
2%
8%
0.05%
0.1%
19%
230%
14.5%
13%
10%
25%
25%
2%
8%
0.07%
0.14
Apprenticeship Levy
2021/22 2020/21
Apprenticeship Levy Allowance (per employer)
Apprenticeship Levy rate (gross employee earnings)
£15,000 £15,000
0.5%
0.5%
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Corporation tax on chargeable gains: indexation allowance
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
–
82.61
86.84
91.20
96.25
100.0
103.3
111.0
119.5
130.2
135.6
137.9
141.3
146.0
150.2
154.4
159.5
163.4
166.6
171.1
173.3
178.4
183.1
188.9
193.4
201.6
209.8
210.1
217.9
229.0
238.0
245.8
252.6
255.4
258.8
265.5
–
82.97
87.20
91.94
96.60
100.4
103.7
111.8
120.2
130.9
136.3
138.8
142.1
146.9
150.9
155.0
160.3
163.7
167.5
172.0
173.8
179.3
183.8
189.6
194.2
203.1
211.4
211.4
219.2
231.3
239.9
247.6
254.2
256.7
260.0
268.4
79.44
83.12
87.48
92.80
96.73
100.6
104.1
112.3
121.4
131.4
136.7
139.3
142.5
147.5
151.5
155.4
160.8
164.1
168.4
172.2
174.5
179.9
184.6
190.5
195.0
204.4
212.1
211.3
220.7
232.5
240.8
248.7
254.8
257.1
261.1
269.3
81.04
84.28
88.64
94.78
97.67
101.8
105.8
114.3
125.1
133.1
138.8
140.6
144.2
149.0
152.6
156.3
162.6
165.2
170.1
173.1
175.7
181.2
185.7
191.6
196.5
205.4
214.0
211.5
222.8
234.4
242.5
249.5
255.7
258.0
261.4
270.6
81.62
84.64
88.97
95.21
97.85
101.9
106.2
115.0
126.2
133.5
139.3
141.1
144.7
149.6
152.9
156.9
163.5
165.5
170.7
174.2
176.2
181.5
186.5
192.0
197.7
206.2
215.1
212.8
223.6
235.2
242.4
250.0
255.9
258.5
262.1
271.7
81.85
84.84
89.20
95.41
97.79
101.9
106.6
115.4
126.7
134.1
139.3
141.0
144.7
149.8
153.0
157.5
163.4
165.6
171.1
174.4
176.2
181.3
186.8
192.2
198.5
207.3
216.8
213.4
224.1
235.2
241.8
249.7
256.3
258.9
263.1
272.3
81.90
85.30
89.10
95.23
97.52
101.8
106.7
115.5
126.8
133.8
138.8
140.7
144.0
149.1
152.4
157.5
163.0
165.1
170.5
173.3
175.9
181.3
186.8
192.2
198.5
206.1
216.5
213.4
223.6
234.7
242.1
249.7
256.0
258.6
263.4
272.9
81.90
85.68
89.94
95.49
97.82
102.1
107.9
115.8
128.1
134.1
138.9
141.3
144.7
149.9
153.1
158.5
163.7
165.5
170.5
174.0
176.4
181.6
187.4
192.6
199.2
207.3
217.2
214.4
224.5
236.1
243.0
251.0
257.0
259.8
264.4
274.7
81.85
86.06
90.11
95.44
98.30
102.4
108.4
116.6
129.3
134.6
139.4
141.9
145.0
150.6
153.8
159.3
164.4
166.2
171.7
174.6
177.6
182.5
188.1
193.1
200.1
208.0
218.4
215.3
225.3
237.9
244.2
251.9
257.6
259.6
264.9
275.1
82.26
86.36
90.67
95.59
98.45
102.9
109.5
117.5
130.3
135.1
139.9
141.8
145.2
149.8
153.8
159.5
164.5
166.5
171.6
174.3
177.9
182.6
188.6
193.3
200.4
208.9
217.7
216.0
225.8
238.0
245.6
251.9
257.7
259.5
264.8
275.3
82.66
86.67
90.95
95.92
99.29
103.4
110.0
118.5
130.0
135.6
139.7
141.6
145.3
149.8
153.9
159.6
164.4
166.7
172.1
173.6
178.2
182.7
189.0
193.6
201.1
209.7
216.0
216.6
226.8
238.5
245.6
252.1
257.1
259.8
265.5
275.8
82.51
86.89
90.87
96.05
99.62
103.3
110.3
118.8
129.9
135.7
139.2
141.9
146.0
150.7
154.4
160.0
164.4
167.3
172.2
173.4
178.5
183.5
189.9
194.1
202.7
210.9
212.9
218.0
228.4
239.4
246.8
253.4
257.5
260.6
267.1
278.1
Retail prices index
(January 1987 = 100.0)
Note – no further indexation allowance will apply for disposals after 1 Jan 2018 – the Dec
2017 rate should be used for all subsequent sales.
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including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
VAT
after 1 April 2021 after 1 April 2020
Standard Rate
Reduced Rate *
Annual Registration Limit
De-registration Limit
VAT Fraction – standard rate
Maximum turnover to join:
Cash Accounting Scheme
Annual Accounting Scheme
Flat Rate Scheme (ex VAT)
20%
5%
£85,000
£83,000
1/6
20%
5%
£85,000
£83,000
1/6
£1,350,000
£1,350,000
£150,000
£1,350,000
£1,350,000
£150,000
* Including temporary reduced
rate for hospitality and tourism
sector from 15 July 20 to 30
September 21. This rises to
12.5% from 1 October 21 to 31
March 22.
Stamp Duty Land Tax
Value of property (£)
Residential property**
0
– 125,000
125,001 – 250,000
250,001 – 925,000
925,001 –1.5m
remainder (over £1.5m)
Stamp duty rate (%)
not buy to let
0*
2*
5*
10*
12*
* 3% supplement on additional dwelling purchased over £40,000.
** For an initial temporary relief period (1 April 21 – 30 June 21) these rates are reduced
to <£500K = 0%, £500K – £925K = 5% (above this normal rates apply). For a further
temporary relief period (1 July 21 – 30 Sept 21) rates are reduced to £0 – £250K = 0%,
>£250K – £925K = 5% (above this normal rates apply).
Value of property (£)
Non-residential property
up to 150,000
150,001 – 250,000
over 250,000
Stamp duty rate (%)
0
2
5
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including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
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Annual Tax on Enveloped Dwellings
Value of property (£)
500,000 – 1,000,000
1,000,001 – 2,000,000
2,000,001 – 5,000,000
5,000,001 – 10,000,000
10,000,001 – 20,000,000
20,000,000
ATED charge (£)
3,700
7,500
25,300
59,100
118,600
237,400
Scottish Land and Buildings Transactions Tax
Value of property (£)
Residential property**
0
– 145,000*
145,001 – 250,000
250,001 – 325,000
325,001 – 750,000
Over 750,000
LBTT rate % (>25 Jan 19)
0*
2*
5*
10*
12*
* 4% supplement on additional dwelling purchased over £40,000.
** LBTT relief for 1st time purchasers up to £175,000.
Non-residential property (on or after 25 Jan 19)
0
– 150,000
0
150,001 – 250,000
1
over 250,000
5
Welsh Land Transaction Tax
Value of property (£)
Residential property**
0
– 180,000*
180,001 – 250,000
250,001 – 400,000
400,001 – 750,000
750,001 – 1,500,000
Over 1,500,000
LTT rate %
0*
3.5*
5*
7.5*
10*
12*
* 4% supplement on additional dwelling (3% before 22 December 20)
** LBTT relief for 1st time purchasers up to £175,000. Effective 27 July 20 to 30 June 21
reduced rates apply for purchases up to £250K = 0%, (above rates apply
thereafter)
Non-residential property
0
– 150,000
0
150,001 – 250,000
1
250,001 – 1,000,000
5
over 1,000,000
6
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Environmental taxes
2021/22 (2020/21)
Landfill tax (England and NI):
Standard rate (per tonne)
Lower rate (inactive waste per tonne)
Aggregates levy (per tonne)
Climate Change Levy (main rates):
Electricity
Natural Gas
LPG
£96.70 (£94.15)
£3.10 (£3.00)
£2.00 (£2.00)
0.775p/kwh
0.465p/kwh
2.175p/kg
Insurance Premium Tax:
Standard Rate
Higher Rate (travel, appliances, some vehicles)
12%
20%
Air Passenger Duty:
Band
Standard rate
(Other than lowest class of travel)
£26
Higher rate
A (0–2000 miles)
Reduced rate
(Lowest class of travel)
£13
B (>2000 miles)
£82
£180
£541
£78
HMRC interest rates
All taxes (since 7/04/20)
Late
Repayment
Payment (%) (%)
2.6
0.5
Average Official rate for 2021/22
2.0%
(These rates change occasionally – see the HMRC website for details)
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Duty rates
Duty
Typical Item
Cigarettes
16.5% of retail packet of 20
price + £244.78
per thousand
Cigars
£305.32/kg
packet of 5
Hand rolling tobacco £271.40/kg
30g
Beer
19.08p/litre
pint
8.42p for low strength or an extra 5.69p for high strength apply
Wine
>22% abv
15%–22% abv
5.5%–15% abv
4%–5.5% abv
1.2%–4% abv
Sparkling wine
5.5%–8.5% abv
8.5%–15% abv
Cider/Perry
Still
1.2%–6.9% abv
6.9%–7.5% abv
7.5%–8.5% abv
Sparkling
1.2%–5.5% abv
5.5%–8.5% abv
Spirits
£28.74/litre pure alcohol
£3.9672/litre
75cl bottle
£2.9757/litre
£1.2608/litre
91.68p/litre
£2.8810/litre
£3.8115/litre
75cl bottle
40.38p/litre
50.71p/litre
61.04p/litre
75cl bottle
40.38p/litre
£2.881/litre
75cl bottle
£28.74/litre of
pure alcohol
70cl bottle
Fuel Duties
Unleaded/Heavy oil (Diesel)/Bio-diesel
& bioethanol
Bio-diesel for non-road use
LPG
31.61p/kg
Other Natural gas (road fuel)
Fuel Oil
10.7p/litre
Aviation gasoline
57.95p/litre
11.14p/litre
24.7p/kg
38.2p/litre
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
Questions
Section 1 (20 marks)
Answer to all questions
1.1 - Business structure has different economic, legal and tax consequences. As a result,
please explain the tax advantages and disadvantages of running a business as a sole
trader, a partnership, and a limited company.
(7 marks)
1.2 - Value Added Tax (VAT) has become an essential source of income for governments
worldwide. Therefore, considering the principles of VAT - an indirect tax - please explain
why it is such a successful tax and how it operates in practice.
(7 marks)
1.3 - Explain the differences between the different National Insurance Classes.
(6 marks)
Section 2 (40 marks)
Joan Myers is a designer for a clothing company named "Whitesnow Ltd" incorporated in
Wakefield. The company is very successful due to the fashion clinic project set up by Joan
in 2019. Joan is preparing all the information to her tax return for the current tax year. She
knows you are a very successful accountant and asks for your professional advice. Joan
emails you with the following information:
•
My gross salary for the tax year was £81,000 (income tax of £19,800 and national
insurance contributions of £5,500 deducted under PAYE). During the year, I made the
following contributions: I contributed 5% of my salary to a registered Occupational
Pension Scheme, and my employer contributed a further 6%.
•
In 2019, when I was invited to set up the fashion clinic, my employer provided a laptop.
I used the equipment both for work and for personal use at home. The equipment cost
the company £2,400.
•
In addition, the company offers me the use of a mobile phone that I also use privately.
The total cost to the company is £540 for the year, and approximately 50% of the usage
is personal (non-business-related).
Page 16 of 23
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
•
I am a single mother, and the company has a solid policy to support parenting.
Therefore, the company's nursery is located in the company's main building, and I can
go and see my baby often. I was told that the company's nursery costs £4,200 per child.
•
Furthermore, I use a company-provided motor car, which is available for private, nonbusiness use. The diesel-engine car had a list price of £27,000 when it was made
available to me in August 2019, as a newly registered vehicle, with a CO2 emission
rating of 132 g/km. Whitesnow Ltd obtained the car on a lease hire contract for which
it pays £650 per month. During 2021/22, I drove 25,000 miles in total; 14,000 being
business mileage. The car required repairs costing £1,800 during the year, and the
company met this cost; as well as paying for the insurance (£490), Road Tax (£120),
Automobile Association membership (£85), new tyres (£320), servicing (£350) and all
the fuel I used – a cost of £2,600. When I went on holiday in 2021, I left the vehicle in
the company's car park and gave the keys to my manager for safekeeping. The rules
of the employer's car scheme require me to contribute £50 per month towards my
private use of the car and £25 per month towards the fuel consumed on personal
journeys. I made these payments.
•
In addition to my salary, I also received the following income:
Dividends from UK companies
Premium Bond winnings
Building Society interest
Interest from an ISA
£
5,200
1,000
720
350
•
I gave £420 to a charity during the year, completing a Gift Aid
declaration.
•
In February, I also sold my shares in Suzuki plc (a listed company) for
£22,000. I paid a commission on the sale of 2% of the proceeds. The
shares were acquired in a single transaction in May 1999 for £2,200.
2.1 - As Joan receives several benefits in addition to her salary, please calculate the
total value of Joan’s Benefit in Kind (BIK).
(10 marks)
2.2 – Calculate Joan’s total Income Tax payable considering all the information
provided above.
(15 marks)
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the use and distribution of programme materials please see the Arden Student Terms and Conditions.
2.3 - Calculate the Capital gains Tax payable and the state the date by which any
additional tax payments need to be made.
(15 marks)
Section 3 (40%)
Harrogate Chocolate Ltd is a limited company incorporated under the United
Kingdom’s (UK) law. The company is established in Harrogate and is resident in the
UK.
Harrogate Chocolate Ltd trades in hand made, vegan, sugar free chocolates and hot
chocolates. Harrogate Chocolate Ltd is different from the other companies
established in the market across the UK. Therefore, they use the finest chocolates
that they buy from the parent company BelManches Chocolate Plc. Harrogate
Chocolate Ltd commenced trading on the 1 of October 2022 and the company
prepared its first accounts for the six-month period ending 31 March 2023.
Paul William is the financial controller, and he prepared the following information:
1 - Trading profit
The tax adjusted trading profit based on the draft accounts for the six-month period ended
31 March 2022 is £368,400. This figure is before making any adjustments required for:
•
Director’s remuneration of £23,000 paid to the managing director of Harrogate
Chocolate ltd. The remuneration is in respect of the period ended 31 March
2022 but was not paid until 5 April 2022. No accrual has been made for this
remuneration in the draft accounts. The managing director received no other
remuneration from Harrogate Chocolate Ltd during the tax year 2021/22.
•
Capital allowance or Research & Development reliefs.
2 - Dividend Received
On 31 March 2023 Harrogate Chocolate Ltd paid a dividend of £6.750 to its parent
company BelManche Chocolate Plc.
3 - Donation
Harrogate Chocolate Ltd made a donation to a qualifying charity of £1,800 on 20 March
2022.
Page 18 of 23
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
including without limitation electronic, mechanical, photocopying, recording or otherwise, without the prior written consent of Arden University. To find out more about
the use and distribution of programme materials please see the Arden Student Terms and Conditions.
4 - Plant and machinery
Harrogate Chocolate Ltd, purchased the following assets in respect of the six-month period
ended 31 March 2022:
•
•
•
20 September 2021
5 October
2021
11 October
2021.
•
•
•
8 November 2021.
18 February 2022
Used office equipment
New machinery.
Building alterations necessary
for machinery installation.
Computer equipment for use in
R & D of new production techniques
Motor Car (CO2 135 g/Km).
£
3,400
10,200
4,700
17,800
10,600
The motor car purchased on 18 February 2022 is used by the sales director who estimates
15% of the mileage is for private journeys.
5 - Research & Development
Harrogate Chocolate Ltd had a new factory constructed at a cost of £166,100 that the
company brought into use on 1 October 2021. The cost was made up as follows:
Land
Site preparation
Structural building costs
Cold & hot water systems
Air heat & ventilation systems
Electric car charging point
£
65,700
8,000
74,900
5,200
8,800
3,500
166,100
6 - Research & Development
In November 2021, the company set up a new department to focus on the development of
a new, innovative, production technique. The company wants to improve the taste of sugar
free chocolate. It was anticipated that the technique would meet the criteria for “Research
& Development” tax relief, and the company would qualify as a small/medium sized entity.
In addition to the computer equipment purchased, Harrogate Chocolate Ltd also employed
two new staff to help with the new process:
•
Roger was employed from 1 November 2021 on a two-year term fixed
exclusive R&D contract with an annual salary of £42,500.
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materials or this publication may be reproduced, shared (including in private social media groups), stored in a retrieval system or transmitted in any form or means,
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•
Saara was appointed on 1 December 2021 on a permanent contract but was
only anticipated to spend 25% of her time on operational tasks and 75% on
R&D. Saara’s annual salary is £35,700.
7 - Group Ownership Structure
Harrogate Ltd is 100% owned by the parent company BelManches Chocolate Plc which
also holds the following shareholding:
100% Nether Ltd
75%Suggar Ltd.
80% Hot Ltd.
45% Cake Ltd.
60 % ChocVeg Ltd.
UK.
UK.
USA.
UK
UK.
Dormant
Trading loss £ 50,780 (for the year to 31 March 2023)
International
Acquired 3 January 2023
Requirements:
3.1 - Explain when an accounting period starts for corporation tax purposes.
(5 marks)
3.2 - Using all the relevant information provided above, calculate Harrogate Chocolate
Ltd taxable total profit for the six months ended 31 March 2023.
(20 marks)
3.3 - Calculate the corporation tax payable by Harrogate Chocolate Ltd assuming the
maximum group relief is surrendered from Suggar Ltd to Harrogate Chocolate Ltd.
(10 marks)
3.4 - State the dates on which Harrogate is required to file the CT 600 corporation
tax return for the six months period to 31 March 2023 and when any tax payment(s)
will be due for the period.
(5 marks)
End of questions
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Referencing Guidelines
You MUST underpin your analysis and evaluation of the key issues with appropriate
and wide ranging academic research and ensure this is referenced using the AU
Harvard system(s).
Follow this link to find the referencing guides for your subject: Arden Library
Submission Guidance
Assignments submitted late will not be accepted and will be marked as a 0%
fail.
Your assessment can be submitted as a single Word (MS Word) or PDF file, or, as
multiple files.
If you chose to submit multiple files, you must name each document as the question/part
you are answering along with your student number ie Q1 Section A STUXXXX. If you
wish to overwrite your submission or one of your submissions, you must ensure
that your new submission is named exactly the same as the previous in order for
the system to overwrite it.
You must ensure that the submitted assignment is all your own work and that all
sources used are correctly attributed. Penalties apply to assignments which show
evidence of academic unfair practice. (See the Student Handbook which is available
on the A-Z key information on iLearn.)
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Assessment Criteria (Learning objectives covered - all)
Level 5 reflects the continuing development in knowledge, understanding and skills from Level 4. At Level 5, students are not expected to be fully
autonomous but are able to take responsibility for their own learning with appropriate guidance and direction. Students are expected to further
develop their theoretical knowledge within a more intellectual context and to demonstrate this through more complex forms of expression which
move beyond the descriptive or imitative domain. Students are expected to demonstrate skills of analysis in both problem-solving and resolution.
Grade
First
(1)
Mark
Bands
80%+
7079%
Upper
second
(2:1)
6069%
Lower
second
(2:2)
5059%
Generic Assessment Criteria
An outstanding information base exploring and analysing the discipline, its theory and any associated ethical considerations.
There is sophisticated use and management of learning resources and a high degree of autonomy is demonstrated. Writing is outstandingly
well structured and accurately referenced throughout. Where appropriate, outstanding professional skills are demonstrated.
The work is original and with some additional effort could be considered for internal publication.
An excellent knowledge base within which the discipline is explored and analysed. There is a degree of originality in the app roach.
The work demonstrates confidence and autonomy and extends to consider ethical issues. Learning resources have been managed
confidently. Writing is exceptionally well structured and accurately referenced throughout. Where appropriate, an excellent level of
professional skills are demonstrated and the work demonstrates a high level of intellectual and academic skills.
A very good knowledge base which explores and analyses the discipline, its theory and any associated ethical issues.
There is evidence of some originality and independence of thought. A very good range of learning resources underpin the work and there is
evidence of growing confidence and self-direction. The work demonstrates the ability to analyse the subject and apply theory with good
academic and intellectual skills. Academic writing skills are very good, expression is accurate overall and the work is consistently referenced
throughout.
A good understanding of the discipline which begins to analyse the subject and apply some underpinning theory. There may be reference
to some of the ethical considerations. The work shows a sound level of competence in managing basic sources and materials.
Academic writing skills are good and accurate overall and the work is planned and structured with some thought.
Professional skills are good (where appropriate). The work lacks original thought, but academic and intellectual skills are moving into the
critical domain. The work is referenced throughout.
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Third
(3)
4049%
Marginal
Fail
3039%
29%
and
below
Satisfactory level of performance in which there are some omissions in understanding the subject, its underpinning theory and ethical
considerations. There is little evidence of independent thought, and the work shows a basic use of sources and materials. Academic and
intellectual skills are limited. The work may lack structure overall. There are some difficulties in developing
professional skills (where appropriate). There is an attempt to reference the work.
A limited piece of work in which there are clear gaps in understanding the subject, its underpinning theory and ethical considerations.
The work shows a limited use of sources and materials. Academic and intellectual skills are weak and there are errors in expression and the
work may lack structure overall. There are difficulties in developing professional skills (where appropriate). The work lacks original thought
and is largely imitative.
A poor performance in which there are substantial gaps in knowledge and understanding , underpinning theory and ethical considerations.
The work shows little evidence in the use of appropriate sources and materials. Academic writing skills are very weak and there are
numerous errors in expression. The work lacks structure overall. Professional skills (where appropriate) are not developed.
The work is imitative.
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