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Examination

The document outlines two exercises related to tax calculations for Bentley and Peter for the tax year 2024/25. Bentley's income includes a salary, living accommodation, a car benefit, an award, and luncheon vouchers, while Peter's trading profit is derived from his bicycle dealership, with various adjustments needed for tax purposes. Both exercises require the calculation of income tax liabilities based on the provided financial details.

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9 views2 pages

Examination

The document outlines two exercises related to tax calculations for Bentley and Peter for the tax year 2024/25. Bentley's income includes a salary, living accommodation, a car benefit, an award, and luncheon vouchers, while Peter's trading profit is derived from his bicycle dealership, with various adjustments needed for tax purposes. Both exercises require the calculation of income tax liabilities based on the provided financial details.

Uploaded by

xoaikhongchua2004
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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EXAMINATION

Exercise 1 (5 marks)
Bentley works as a manager for Thunder Ltd which is located in London. The
following information is available for the tax year 2024/25:
1. Employment income:
a. Bentley was paid a gross salary of £50,000 by Thunder Ltd. Income tax of
£2,000 was deducted from this figure under PAYE.
b. Thunder Ltd has provided Bentley with living accommodation which is not
job-related since 6th June 2024. The accommodation has an annual value of £3,000
and cost Thunder Ltd £80,000 in October 2023.
c. Throughout the tax year 2024/25 Thunder Ltd provided Bentley a petrol car
with CO2 emission of 106 g/km. The car’s list price is £25,000. Bentley was required
to contribute £1,500 towards the purchase cost.
d. In July 2024, Thunder Ltd gave Bentley an award of £5,000 under a staff
suggestion scheme.
e. Throughout the tax year 2024/25, Thunder Ltd gave Bentley luncheon
vouchers of £2 per day (for 200 working days) which was available to all other
employees.
2. Other information:
a. During 2023/24, Bentley received bank interest of £7,000 and dividends of
£1,000.
b. During the tax year 2023/24, Bentley made Gift Aid Donations totaling
£1,200 (net) to national charities.
Required: Calculate the income tax payable by Bentley for the tax year
2024/25.
Exercise 2 (5 marks)
Peter commenced trading on 1 April 2024 as a dealer of racing bicycle in the
UK. Peter prepared its first account ended 31 March 2025. The following
information is available:
Trading profit:
The trading profit based on the draft accounts for the period ended 31 March
2024 is £250,000. The figure is before making any adjustments required for:
(1) Capital allowance
(2) Legal fees of an initial short lease of a shop of £500
(3) Parking fine of Peter on business of £200
(4) Property leasing income of £10,000 (Property income)
(5) Dividends from ISA of £5,000
Plant and machinery
The account for the period ended 31 March 2024 showed the following
additions and disposals of plant and machinery:
Cost £
10 August 2024 Purchased machinery 120,000
26 October 2024 Purchased a motor car 20,000
15 December 2024 Purchased a motor car 19,000
The motor car purchased on 26 October 2024 for £20,000 was a new car and
has a CO2 emission rate of 0 g/km
The motor car purchased on 15 December 2024 for £19,000 was a second
hand car and has a CO2 emission rate of 45 g/km (used 20% for private purpose of
Peter)
Required: Calculate Peter’s income tax liability for the tax year 2024/25.

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