I will Help!!!!

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  • wolfe
    wolfe Registered Posts: 121 Dedicated contributor 🦉
    thanks u r an angel
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Okay, first let's start with NIC

    People who are employed under the PAYE pay NIC at 11% These are Primary Class 1 Contributions.

    Employers who employee people on a payroll pay NIC of 12.8% these are defined into 2:

    Class 1 Contributions - these are at 12.8% of each employees gross pay....employees are entitled to earn £105 per week before paying NIC

    Class 1A Conributions - these are at 12.8% on benefits in kind..

    So for example....if an employees earns £479 per week and has use of a car and the benefit is £3120

    The employer will pay

    Class 1 - (479-105) x 12.8% (per week)

    +

    Class 1A £3120 X 12.8% = £399.36


    If you are a sole trader/partnershp (not under PAYE) you pay -
    Class 2 which are £2.30 per week unless you claim the small earnings excepion which is profits under £4,825 and Class 2 or 4 need not be paid

    Class 4 - People who have profits over £5,435 are liable to pay Class 4

    it is 8% on profits between £5435 and £40,040...therefore if you have profits of £6000 you are liable to pay Class 2 at £2.30 per week = £2.30 x 52 = £119.60

    and also Class 4 - take your profits of £6,000 - £5,435 = £565 x 8% = £45.20

    If your profits exceed £40,040 you pay them a 1%...

    HOPE THIS CLEARS UP NIC.....
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    BADGES OF TRADE are tests to help ecide whether HMRC believe an activity should be classed as traing. (therefore they will have to declare it and pay tax if it is trading!)
    There are 6 badges of trade: -

    PROFIT MOTIVE
    briefly are they out to make a profit, if they are this indicates trading!

    SUBJECT MATER OF THE ACTIVITY
    does the individual use it for personal use, if not then they are deemed to be trading

    LENGTH OF OWNERSHIP
    If items are sold quite quickly, they are deemed to be trading!

    FREQUENCY OF TRANSACTIONS
    If there is a series of similar ransactions they are deemed to be trading

    SUPPLEMENTARY WORK
    Do they make repairs to the item or work on them o update or renew them? If so they are deemed to be trading

    REASONS FOR ACQUISTION AND SALE
    If the individual has a deemed purchase and sale ...i.e has an intention to sell....it s deemed trading...

    Hope ths helps!!
  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
    how do you keep so much info in your brain without it turning to mush
  • diamondavid
    diamondavid Registered Posts: 33 Regular contributor ⭐
    can u tell me all of the PEV ratio and the formula please?
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    ]Yes No probs -

    GROSS PROFIT MARGIN

    GROSS PROFIT / SALES X 100

    NET PROFIT MARGIN

    NET PROFIT/SALES X 100

    OPERATING PROFIT %

    OPERATING PROFIT / SALES X 100

    EXPENSES AS A % OF SALES

    EXPENSES/SALES X100

    RETURN ON CAPITAL EMPLOYED

    OPERATING PROFIT / CAPIAL EMPLOYED X 100

    NTEREST COVER

    OPERATING PROFIT / INTEREST

    ASSET TURNOVER

    TURNOVER / FIXED ASSES + NET CURRENT ASSETS

    CURRENT RATIO

    CURRENT ASSETS/CURRENT LIABILITIES

    GEARING

    LONG TERM DEBT / CAPITAL EMPLOYED (THERE IS OTHER OPTIONS AVAILABLE BUT I PREFER THS ONE)

    QUICK RATIO - ACID TEST RATIO - LIQUID CAPITAL RATIO

    CURRENT ASSETS - STOCK / CURRENT LIABILITIES

    CREDITORS PAYMENT PERIOD IN DAYS

    TRADE CREDITORS/ TRADE PURCHASES (OR COST OF SALES) X 365 ... OR 12 FOR MONTHS

    DEBTORS COLLECTION PERIOD IN DAYS

    TRADE DEBTORS/ CREDIT SALES X 365....OR 12 FOR MONTHS

    STOCK TURNOVER IN DAYS

    STOCK/ COST OF SALES X 365 OR 12 FOR MONTHS

    RETURN ON NET ASSETS


    OPERATING PROFIT/NET ASSETS

    AVERAGE AGE OF STOCK

    0.5 X (OPENING STOCK + CLOSING STOCK) (THERE IS OTHER OPIONS AVAILABLE)

    COST PER UNIT

    COST/UNIT

    CONTRIBUTION MARGIN

    CONTRIBUTION / TURNOVER X 100

    EFFICIENCY RATIO

    STANDARD HOURS FOR ACTUAL PRODUCTION / ACTUAL HOURS X 100

    CAPACITY RATIO

    ACTUAL HOURS/BUDGETED HOURS X 100

    ACTIVITY RATIO

    STANDARD HOURS FOR ACTUAL PRODUCTION/BUDGETED HOURS X 100

    PROUCTION VOLUME RATIO

    ACTUAL OUTPU/ BUDGETED OUTPUT X 100


    HOPE THIS HELPS!!
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    HAHAH PRIMBLE.....I don't to be honest
  • cs_1988
    cs_1988 Registered Posts: 231 Dedicated contributor 🦉
    Hi beckstar,

    Very kind of you to give up your saturday!

    Sitting PEV tomorrow, fairly confident, but one area i just cant find/understand in my book is how to explain fixed overhead variance, what they mean and show?

    ANy Ideas?

    Cheers in advance,

    Chris
  • troy
    troy Registered Posts: 275 Dedicated contributor 🦉
    Wow!
    Do you think you missed any? LOL
    :001_tt2:
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    No problem I am sitting PEV tommorrow aswell so helps me out....

    When you say fixed overhead variance are you refering to:

    Fixed overhead expenditure variance

    Fixed overhead volume variance

    Fixed overhead efficiency variance

    Fixed overhead capacity variance

    Ge back to me just to verify ths is what you mean and I'll answer your question :)
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Hi Troy....I was revising them last night so I'd fort I'd list all of them that they could throw at us lol :)
  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
    lol people are studying so hard they dont know what day it is. dam exams.
    i'm so not doing distant learning next time
  • cs_1988
    cs_1988 Registered Posts: 231 Dedicated contributor 🦉
    Yeah all of them, Fixed overhead Expenditure is obvious, but the other three. Calculating them is no problem, explaining what they mean is another story!

    Yeah, got three exams this week, you? Actually looking forward to PEV and PCR, not so much dfs!
  • diamondavid
    diamondavid Registered Posts: 33 Regular contributor ⭐
    sorry to bother you again, but can u tell me what each ratio mean(gd or bad etc) TYVM
  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
    i'm picking you brains again too. on btc can you please explain FYA, AIA, WDA
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Hey cs

    Fixed Overhead Expenditure Variance

    This variance shows whether actual spending on fixed overheads was more than budgeted if adverse or less than budgeted if favourable. Reasons for variance could include poor budgeting or that actual costs are different due to unforseen price changes. Because these overheads are "fixed" it cannot be due to different output.

    Fixed Overhead Volume Variance

    this shows the difference between the overheads that would be absorbed by the planned volume of output and the amount absorbed by the actual output. The breakdown of this variance into Efficiency and capacity explains why there had been higher or lower output than the budget forecast.

    Fixed Overhead Efficiency Variance

    this variance shows how the efficient use of resources effects the volume of output. Favourable = output has been created using less resources than had been expected and quicker than bugeted for. May have worked more efficient due to better materials, better trained labour etc

    Fixed Overhead Capacity Variance

    this variance shows how the amount of resources used compared with the budget affects the volume of output. Favourable = is when they have over absorbed - more resources have been used therefore spreading the fixed overhead costs more widely. may have produced more due to bad budgeting, better raine teamforce etc

    Hope that helps!

    Yes I have PEV, BTC and PTC...I just want to ge them out the way lol :)
  • Chris023
    Chris023 Registered Posts: 93 Regular contributor ⭐
    I have got PCR and PTC Beckstar

    How are you finding PTC? I am finding it the worst one of the lot! So many niggly little rules to remember. I think I have just got the hang of section 1. Going over section 2 now
  • cs_1988
    cs_1988 Registered Posts: 231 Dedicated contributor 🦉
    Thanks beckstar
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
    If the question ask:

    calculate fixed production overheads absorbed into production

    would you work out that is was the standard fixed overheads for actual production?

    I messed up a question because I didn't understand what was actually required!
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Hey david - i will try to do my best

    GROSS PROFIT MARGIN, shows how much gross profit you have as an % - the higher the better , we want it to increase over time.

    NET PROFIT MARGIN, shows how much net profit you have as an %. the higher the better , we want it to increase over time. If it is low it s generally due to costs arisng.

    OPERATING PROFIT % shows how much operating profit you have as an %, his is before interest charges and tax. It is the final figure of what you have made!

    EXPENSES AS A % OF SALES, shows a expenses as a % of your turnover....how much of your turnover was spent on tha exact expenses, helps planning an reducing costs

    RETURN ON CAPITAL EMPLOYED

    The return as a % you get on your money employed - generally want this to be high and increasing over time.

    NTEREST COVER

    shows how many times you can afford to pay your interest, want this high so we can afford interest payments if not the company is in bother

    ASSET TURNOVER

    is the number of times the value of the assets has been obtained in sales.

    CURRENT RATIO

    i shows the number of times that the curren liabilites are covered by the current assets. ideally 2:1

    GEARING

    shows how much as a % the company is finanaced by debt want this to be as low as possble preferably below 50%

    QUICK RATIO - ACID TEST RATIO - LIQUID CAPITAL RATIO

    shows that the current liabilities can be covered by the companies current assets excluding stock beacuse that is the least liquid current asset. The guide is 1:1

    CREDITORS PAYMENT PERIOD IN DAYS

    how long it take sus to pay suppliers, try and make terms so that the company gets as long as possible to help cashflow

    DEBTORS COLLECTION PERIOD IN DAYS

    how long it takes for debtors to pay us - want this as soon as possible in order to improve cashflow - money is better in our pockets than thers!!!


    STOCK TURNOVER (IN DAYS or months)

    shows the number of times per year that the stock is turned over or sold. the result can also be the average holding of stock in days or months.


    RETURN ON NET ASSETS


    the amount of return you get back on your net assets. want this to be fairly big

    COST PER UNIT

    dividing the cost by a unit e.g. materials cost by 100 units



    HOPE THIS HELPS!!
  • lucy1988
    lucy1988 Registered Posts: 74 Regular contributor ⭐
    Hi,

    I always get confused in BTC with the different rules for Income tax and Corporation tax can you help me with the different rules?

    Thanks
  • zoeeileen
    zoeeileen Registered Posts: 19 New contributor 🐸
    PEV Volume Variance

    Hi Hope you dont mind me asking.

    But with the fixed overhead capacity variance, and the efficiency variances i am normally fine working these out, but i keep getting caught out with the volume variance.

    The Fixed overhead volume variance is broken down into efficiency & capacity just wondering if there is a good way of working out the volume if you know the efficiency & capacity.

    Also with the lifecycle costing, can depreciation be involved if it can how can we deal with this.

    Thankyou very much for your help.

    Zoe, Good luck to all tomorrow:001_smile:
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Primble, sorry i'm late on replying

    AIA - ANNUAL INVESTMENT ALLOWANCE
    This can be claimed up to £50,000 per year, it applies to all plant and machinery except CARS
    Any acquisitons that exceed 50,000 wll be dealt with through the pool.

    This allowance will need to be apportioned for shorter CAP'S

    FYA - FIRST YEAR ALLOWANCES
    These are 100% Only for low emission cars 110 g or lower. These are added on to AIA Claims and Capital Allowances worked through the pool

    WDA - Writing Down Allowances 20%

    Theseare for assets that enter the pool.

    20% is allowable for the main pool and 20% or £3,000 which ever is lowest for expensive cars
    These also nee to be apportioned for llong CAP'S I.e longer than 12 months

    If you have any more problems I'll try o answer them.
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Chris

    Finding PTC the best actually, not revised too much though saving that for Wed and Thurs !!
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Londina,
    quite possibly but I don't quite get that myslef....f you tell me the quesion and answer I'll try to get back to you with a better answer...
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Ino t is quite tricky to remember this especially if you are doing both exams like me!!
    PTC - Income Tax

    Personal Allowance 6035
    Using tax bands 20% - 40%

    Capital Allowances (INC AIA +FYA)

    CGT:

    Annual Exempt Amount £9,600
    Rate of 18%
    Part Disposal Rules
    Chattel Rules
    Improvement Expenditure
    Shares
    Gift Relief
    Rollover Relief
    Entrepreneurs Relief




    BTC -Corporation Tax
    Marginal Relief
    Corporation Tax Profits 21%, 28%

    Capital Allowances (inc AIA, FYA)


    Indexation Allowance
    Part Disposal Rules
    Chattel Rules
    Improvement Expenditure
    Shares (Remember the indexation)
    Rollover Relief

    That's all I can think of atm!!! :)

    Need any more help let me know!!
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Hi Zoe

    Yes if you know the fixed overhead capacity variance, and the efficiency variance... I just make i easier for myself and take one of the other.

    Or I take the standard hours for actual production - budgeted hours and mutliply by the absorpton rate.

    All 3 link you see:)
  • zoeeileen
    zoeeileen Registered Posts: 19 New contributor 🐸
    Thanks

    Thankyou very much for your help worried about tomorrow.

    Zoe
  • 111beckstar111
    111beckstar111 Registered Posts: 158 Dedicated contributor 🦉
    Don't be - your'll be fine :)
  • block15
    block15 Registered Posts: 21 New contributor 🐸
    In PEV, I'm a bit confused by currency variances. I think it has only come up in Dec 05 (maybe due to come again .. ??). Is this the right formula as my notes from class are a bit vague :001_unsure:

    Actual quantity x (standard price - standard price at new rate) = variance due to currency

    Actual quantity x (standard price at new rate - actual price) = variance due to other reasons

    Osbourne only has one little question on it so I just want to check in case :thumbup1:
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