BTC - Redecoration, PCT and Tax

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hello,

I am very worried about my performance in this morings exam :( .

I did not adjust for the redecoration and I cannot find an example of this anywhere - does anyone know the answer?

Task 2.3 PCTCT

I took the adjusted profits and deducted the capital gains and added the share gain to form the PCTCT - was that correct?

Task 2.4 Tax Payable

I applied 30% tax to the PCTCT.

Then I thought about the dividends for ages and then I used the dividends paid rather than the dividends given so used the £100,000 and grossed them up. Then applied the marginal relief formula.

Because I got this task wrong will my answer to Task 2.5 be wrong?

I stated did not have to make payments on account as not making over £1.5 million and went on to detail the date of 9mths one day.

I did write about the payments on account.

Oh my word -sorry post so long - but very worried and now have PTC on Fri

Any thoughts welcome :wink:

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:BTC - Redecoration, PCT and Tax

    I applied the PTC policy that as it is RE-decoration then this is allowable, as it keeps the value of an asset up.

    Had a complete mental block re memo :? just waffled and got it wrong - said 10 months, I know its 9 months and 1 day, exam panic though!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:BTC - Redecoration, PCT and Tax

    i didn't adjust for the redecoration either, messed up on the tax question cos my pctct fig was lower than 100k which was the dividends paid.. so got stuck on that really.. i also took out the private usage in the capital allowances by accident and only allowed 40% fya on the car!! and they're the mistakes that i know i've made!! so i'm pretty annoyed about it... :(
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:BTC - Redecoration, PCT and Tax

    PCTCT is calculated by adding all the income of the business together to form a profit figure (this should not include the dividends received).
    i.e.
    Adjusted trading profit (-capital allowances-IBA)
    + Rental income
    + Interest received
    + Capital Gains
    =PCTCT
    + Gross value dividends received
    = "Notional Profits" (or "P" in the formula for MR)

    The dividend figure that should have been used was the 31500 x 100/90 received figure - the £100K paid out to shareholders was a bit of a red herring cos the company pay more than 19% tax anyway, so it didn't change anything (i think!)
    CT payable was 30% + MR
    Redecoration is a revenue expenditure so is allowable i seem to remember from PTC.

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:BTC - Redecoration, PCT and Tax

    Hi

    I also used the 100000k dividends figure and grossed it up so you are not alone. I missed out the redecoration completely, like you I cannot find anything in it. :cry:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:BTC - Redecoration, PCT and Tax

    There is a useful posting on the technical forum which has me even more worried and stressed. I know its too late now but trying to concentrate on PTC and unable to.

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