ptc dec 09

taskey

here we go

Company car

question 1.4

i am fine with everything else, just a niggle.

have worked out the g/km as 30%, list price of £25,000. the taxable benefit would be £25,000 x 30% = £7,500.

why does the answer then show an additional 40%?

"This is taxable each year that you have the car and would mean an annual tax liability of £7,500 x 40% = £3,000"

and again when doing the fuel allowance

"Therefore, your taxable benefit for the fuel would be £16,900 x 30% = £5,070, giving rise to an annual tax liability of £5,070 x 40% = £2,028"

cant find it anywhere in my book about this 40% and is it a standard figure or is it like the tax band?

thanks in advance

Tracy

Gem7321

Hi Tracy

You're right, the taxable benefit is £7,500, but they've then gone on to calculate the tax liability on the benefit (assuming they're a Higher Rate tax payer) so the tax liability would be 40% of the benefit which is £3,000.

taskey

Gem7321 wrote: »

Hi Tracy

You're right, the taxable benefit is £7,500, but they've then gone on to calculate the tax liability on the benefit (assuming they're a Higher Rate tax payer) so the tax liability would be 40% of the benefit which is £3,000.

thanks Gem, i thought it would be that, i just was not confident.

thanks again

Now onto the next question lol

Tracy