Taxation Btec Hnd Assignment Coversheet

Taxation Btec Hnd Assignment Coversheet

NATIONAL ECONOMICS UNIVERSITY
BTEC HND IN BUSINESS AND MANAGEMENT
Assignment Cover Sheet
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NAME OF STUDENT | |
REGISTRATION NO. | |
UNIT TITLE | Unit12: Taxation |
ASSIGNMENT TITLE | Personal Income tax, Corporation Tax and Capital Gain Tax |
ASSIGNMENT NO | 1 – Work in pair |
NAME OF ASSESSOR | Dao Ngoc Tien, Nguyen Thu Hang |
SUBMISSION DEADLINE | 10 am, Friday, 30 May, 2014 |
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We hereby confirm that this assignment is our own work and not copied or plagiarized from any source. We have referenced the sources from which information is obtained by us for this assignment.
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NAME OF THE STUDENT | REGISTRATION NUMBER | SIGNATURE |
1. | | |
2. | | |
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FOR OFFICIAL USE
ASSIGNMENT GRADE | |
Unit outcomes
Outcome | Evidence for the criteria | Feedback | Assessor’s decision | Internal Verification |
Be able to calculate personal tax liabilities for individual and partnerships(2) | Identify relevant income, expenses and allowances | | a | | |
| Calculate taxable amounts and tax payable, for employed and self-employed individuals and advise on payment dates | | b | | |
| Complete relevant documentations and tax return | | c | | |
Be able to calculate corporation tax liabilities for companies(3) | Calculate chargeable profits | | a | | |
| Calculate the tax liability and due payment dates | | b | | |
| Explain how income tax deductions are to be dealt with | | c | | |
Be able to calculate the capital gains tax payable for individuals and companies(4) | Identify chargeable assets | | a | | |
| Calculate the capital gains and losses | | b | | |
| Calculate the capital tax payable | | c | | |
Merit grades awarded | M1 | | M2 | | M3 | | |
Distinction grades awarded | D1 | | D2 | | D3 | | |
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Overall Comments By AssessorAssignment( ) Well-structuredReference is done properly / should be done (if any)Overall, you’veAreas for improvement: |
ASSESSOR SIGNATURE DATE / / NAME: |
(Oral feedback was also provided)STUDENT SIGNATURE DATE / / NAME : |
FOR INTERNAL USE ONLY DATE / /VERIFIED YES NO VERIFIED BY : NAME : |
Scenario
You are in business as a tax practitioner and have recently gained three new clients. You are required to carry out the following tasks:
PART A
Simon was born on 14 May 1960. He is a manager working for Able plc, a large UK resident company.
In 2009–10 Simon received a gross salary of £100,000 and on 16 February 2010 he received a bonus of £25,000 based on Able plc’s results for the year ended 31 December 2009.
In addition Simon received the following benefits in 2009–10:
i. The use of a company car. The car was a 1200 petrol driven Audi with a CO2 emission rate of 150 grams per kilometre. The recommended list price was £60,000, but Able plc paid £55,000 because of a company discount scheme. Accessories to the value of £5,000 were added at the time that Simon took delivery of the vehicle, which was on 6 October 2006. The company paid for all of the running costs, including the fuel, which amounted to £4,500 for the period to 5 April 2010. Simon used the car for both business and private use. Able plc did not provide Simon with the use of any other car before 6 August 2006.
ii. He received an interest-free loan of £4,500 and need only be repaid on his leaving the company. The loan will be used to purchase various household items.
iii. The use of a company owned house. The house was used permanently by Simon and his family from 6 December 2009. The house had been purchased by the company for £180,000 in May 2002 and had a market value when Simon moved in of £200,000. The annual rateable value of the house was £12,000 and Simon paid £200 a month to the company for the use of the property. Simon paid for all of the household expenses. The house is not classed as job-related.
iv. General business expenses. Simon received an amount of £8 a day for 50 days, including 30 days of business trips in the UK and 20 days of business trips abroad. All of these trips required overnight stays away from home and the amounts paid were used to cover the costs of incidental expenses such as newspapers and telephone calls home.
v. He received luncheon voucher worth £6 per day, an amount equivalent to the normal cost of the meals. The normal working year is 200 working days.
vi. His son, aged three, is presently attending nursery, which is approved childminder status. The company is currently pay nursery fees of £3,600.
vii. On his birthday, the company give him a present worth £2,000.
viii. He makes a qualifying aid donations of 320 of £650 during the year.
ix. They book and pay £10 000 a trip to Vietnam for his family.
x. He received an Iphone5S, which is worth £600 for his use.
xi. Simon owns a country cottage, which he uses as a holiday home for 4 weeks and lets furnished for 48 weeks at £5 per week. His expenses for 2009-2010 were the following :
Advertising £60
Repair to furniture £300
Insurance £400
Council tax and water rates £1800
Cleaning £800
xi.Simon’s other income for 2009–10 was:
Building Society Interest £7,200
Interest on government securities £1,500
Dividends from UK companies £2,700
Dividends from shares held in an
Individual Savings Account (ISA) £1000
All amounts shown are the actual cash amounts received or credited to the account.
The official rate of interest is assumed to be 1.5% per annum.
PART B
Oliver Green, who is born in February 1980, is self-employed running a health food shop. Oliver Green profit and loss account for the year ended 31 December 2009 is as follows:
£ £
Gross Profit 223,200
Expenses
Depreciation (note 1) 2,340
Light and heat (note 2) 1,980
Motor expenses (note 3) 4,700
Rent and rates (note 2) 5,920
Wages and salaries (note 4) 78,520
Repair and renewal (note 5) 1,060
Legal and professional expense (note 6) 3,000
91,910
Net Profit 125,680
Note 1: Capital allowance
The written down value of his plant and machinery fro the year to 31 December 2009 was as follows:
Pool £8,000
Motor car (20% private use by Oliver) £2,500
During the year to 31 December 2010, he had the following transactions:
February 2010 Bought plant £4,000
May 2010 Sold car (original cost £3,000) £1,500
June 2010 Bought car (30% private use by Oliver) £5,000
Note 2 – Private accommodation
Oliver lives in a flat that is situated above the health food shop. 40% of the expenditure included in the profit and loss account for light, heat, rent and rates related to the shop.
Note 3 – Motor expenses
During the year ended 31 December 2009, Oliver drove a total of 25,000 miles, of which 12,000 were for private purposes.
Note 4 – Wages and Salaries
The figure of £78,520 for wages and salaries includes an annual salary of £12,000 paid to Oliver daughter. She works in the health food shop as a sales assistant. The other sales assistants doing the same job are paid an annual salary of £12,000.
Note 5 – Repair and renewal
The figure of £1,060 comprise
Decoration of business premises £ 580
Installation of new improved heating system £ 390
Minor repair £ 90
£1,060
Note 6 - Legal and professional expense include
Fees relating to renewal of lease £ 500
Debt collection £1,500
Accountancy fees £1,000
£3,000
Note 7 – Goods for own use
Each week Oliver takes health food from the shop for her personal use without paying for it. The weekly cost of this food is £25, and it has a selling price of £30.
Other income and expenses
* Oliver has a part-time employment for which she was paid a salary of £8,000 during 2009/10.
* During 2009/10 Oliver received building society interest of £720 and dividends of £450. These were the actual cash amounts received.
* Oliver pays a patent royalty of £90 (net) every quarter for the use of equipment that allows her to make her own organic breakfast cereal.
* During 2009/10 Oliver paid interest of £320 (gross) on a loan taken out on 1 January 2010. Half of the loan was used to purchase equipment for use in her part-time employment and the rest was to purchase household equipments.
Other information
Oliver purchased a holiday flat in December 2004 for £200,000. He spent £5,000 on installing central heating in February 2005 and further £1,000 on repainting the interior of the flat on March 2005. He sold the flat at auction in February 2010 for £400,000, paying 5% fee to the auctioner. Legal cost were £500 in December 2004 and £800 in February 2010. The flat was never his main residence.
Oliver had capital losses brought forward of £4,000.
PART C
The third client is a corporation operating in UK. The company has the following results for the 14 months to December 2010:
Adjusted trading profit (before capital allowances) £1,413,508
Capital allowances claimed
Year to 31 October 2010 £222,650
2 months to 31 December 2010 £37,210
Capital gains
Disposal 15 June 2010 £16,575
Disposal 15 November 2010 £21,692
Building Society interest
Received 31 December 2009 £3,500
Received 31 December 2010 £4,300
UK dividends received on 25 October 2010 £3,150
Accrued building society interest was £3,000 on 31 October 2009, £4,000 on 31 October 2010 and £nil on 31 December 2010.
Task 1 (Use information given in Part A)
* Identify Simon’s relevant income, expenses and allowances for the tax year 2009–10 (2a)
* Calculate the income tax payable by Simon for the tax year 2009-2010. (2 b,c)
* Write a business letter advising Simon on how to change benefits he received in order to reduce his personal tax liability (2b,c)
Task 2 (Use information given in the Part B)
* Calculate Oliver’s tax adjusted trading income for the year ended 31 December 2010. (2 a)
* Calculate the income tax payable by Oliver for 2009/10. (2 b)
Task 3 (Use information given in Part B)
* Calculate Oliver’s capital gain chargeable (4 a,b)
* Calculate capital gains tax payable by Oliver for 2009/10 (4 c)
Task 4 (Use information given in Part C)
* Calculate the profit chargeable to corporation tax (3 a)
* Calculate the corporation tax liability (3 b)
* The company is considering to make a gift aid donation of £20,000 on November 2010. Explain how the tax liability would change. (3 c)
Grading
Pass is achieved by meeting all the requirements defined in the assessment criteria.
Merit Identify and apply strategies to find appropriate solutions (M1)
Characteristics / Possible Evidence – demonstrate relevant theories have applied to calculate tax liability.
Select/design and apply appropriate methods/techniques (M2)
Characteristics / Possible Evidence – a range of methods and techniques have been used for tax computations.
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 and justify valid conclusions on tax advantages to client.
Use critical reflection to evaluate own work and justify valid conclusions. (D2)
Characteristics / Possible Evidence – synthesis used to generate tax computation for individual and self-employed and justify valid conclusions on tax advantages to client.
Take responsibility for managing and organizing activities (D3)
Characteristics / Possible Evidence – demonstrated substantial activities have been planned, managed and organized as well as interdependence are recognized.
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. Content sheet with a list of all headings and page numbers.
4. A fully typed up professionally presented report document. Use 12 point Times New Roman script with 1.5 line spacing.
5. Your assignment should be word-processed and should not exceed 3,500 words in length.
6. Use the Harvard referencing system.
7. Exhibits/appendices are outside this limit.
8. The assignment should be not contain a bibliography – but should contain a list of any references used in the assignment.
NOTES TO STUDENTS
* Check carefully the submission date and the instructions given with the assignment. Late assignments will not be accepted. Submitt a copy of report to Turnitin before the deadline.
* 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, you could have your grade reduced to zero, or at worst, you could be excluded from the course.

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