PTC Exam - How Did You Do?

The Master

Has AAT freedom of speech been reinstated yet?

Elsie

I actually found it worryingly easy. I stayed another hour after I'd finished just going over the paper because I thought that I must have missed something as so much of the syllabus didn't appear.
Saying that I didn't kow the answer to the staff party benefit in kind question and I couldn't remember the limit of long service awards. I know now it's £5000 but if anyone can shed any light on whether staff have to pay tax on a christmas party that would be good. I didn't think so as I never have in the past and surely that would just be far too difficult to control.

debihargrave

not sure what time we can discuss the exam,
how did you find it?

The Master

I learned from the Osborne books and there is no mention in them to a £5,000 limit for a long service award. I made the assumption that they were a type of bonus and therefore taxable as a benefit or simply added to the employees gros salary? What does the 5K limit relate to?

reader

I think the tax free benefit for long service award is £50

and the tax free benefit for christmas party/head is £150

But I 100% agree with elsie, it was worringly easy

debihargrave

I found this question for the PTC CBE (on the study zone) it mentioned long service award:

Complete the following sentences so that the benefit is exempt from tax.

(1) Childcare paid for by employers are exempt up to the first per week.


(2) Provision of mobile telephones is restricted to per employee.


(3) Long service awards are restricted to per year of service.


(4) Relocation expenses up to are allowed.


Options:

(1) £45; £50; £55; £60; £65
(2) 1; 2; 3
(3) £25; £50; £75; £100
(4) £5,000; £6,000; £8,000; £10,000


the answers were:
(1) £55
(2) 1
(3) £50
(4) £8,000

debihargrave

there are supposed to be gaps after 'per'


I too found it very easy, I was out by 11am!

The Master

The osborne books have info on childcare, mobile telephones (altough they dont distinguishbetween personal and business use), nothing on long service awards but relocation is discussed. Just goes to shoe you shouldnt rely on one book for all the answers.e contribution towards the car - I assumed that was a cpital contribution and so deducted 12 x 300 from the list price. Anyone do the same?

Th

reader

I thought the person was contributing £300/month for running costs because contributions to cost tend to be one off payments of £1000 or so.

So I found the benefit on the original cost, and then I deducted the contribution

The Master

It didnt say if it was a revenue or capital contribution but just described it as a "contribution towards the car" - whatever thats supposed to mean?

sama

I wasn't sure if the £300 per month contributions to the car were capital or revenue, but thought as they are monthly, it is more likely to be revenue. I wrote in my answer something like "As it is not clear from the description whether the contributions are of a capital or revenue nature, I assume they are revenue contributions." then I went on and subtracted 12*300 from the benefit calculated just like reader above.

I had no idea about the christmas meal either, just made a guess and said it was tax exempt. I just hope this won't cost too many points.

The Master

sounds like there was confusion over the same questions but most of it was straight forward. only unit 10 to go for me now. has anyone put that off to the end too?

reader

me, but I also have MAC and DFS to do

What is your unit 10 project going to be on?

I'm really struggling to figure out what I should do my project on.

The Master

I havent got a clue. I suppose its best to concentrate on something youve got a decent grasp of! I only do the books for a few friends so I suppose ill try to use one of them as a case study? Ill speak to my support tutor and look at all the supporting info online. sounds like apain in the arse though.

sama

I've only got unit 10 left, at least that's what I'm hoping. I haven't started it yet, I'll look at the online stuff for it over the week end.
Of course this depends on my results for the exams this week (DFS and PTC) as well, but if I'm not mistaken I can avoid having to take two optional exams if I transfer to the new standards. If I want to finish under the old one, I'd have to take either auditing or business tax next year. I'm not very keen on either one of these, so my plan is to pass unit 10 and then transfer. Under the new standard I will have the 2 optional units already completed, PTC and Cash management that I've done on level 3.

Is anyone else doing this? I'm not sure if this is really possible or even right to do, but I definitely don't want to wait until August to get the results of the June exam to finish. I want to be done ASAP.

Tarynmahon

Thank god for that

I came out at 11 as well, and was under the impression it was either extremely easy or I had missed something very big!
I had to think briefly about the long service award, I thought it was £50 per year after 20 years of service, the question said they wanted to give it after 15 years, Im not sure on that one but other than that I think I can quite confidently say my % will be in the 90's, which is bloody good as this was a re-sit, woohoooo, AAT finished!

mickeymacca

Any one off payments to the car allowance come off of the list price before the calculation with emission percentage is made, however any regular payments are deducted from the calculation after the original list price and emission calculation are made. One is a capital payment and one is a revenue payment. It is only for fuel allowance that part payments are dismissed unless paid in full.....hope this helps (and that I am right!!)

bobo

How have you treated disposal of horses? I've treated them each seperate so cost and proceed below 6000 = exempt and my friend treated them as one asset...I haven't thought about it like that

reader

I think horses are wasting chattels (i.e. have a life span less than 50 years) and therefore they are not chargeable assets, i.e. exempt from capital gains

mickeymacca

Yeh I put it was exempt as well, as the whole transaction (acquistion and disposal ) was below £6000, also put that the horses could be a wasting chattel as well as there lifespan was less than 50 years. I think as long as you put down it was exempt you will be ok. I agree though apart from question 1.4 was a very straight forward exam......

ayna

I am trying to remember now, was company paying for the fuel or the employee...
Does anyone remember?

reader

I think the question said something about the employee paying for all the running expenses so I didn't calculate a fuel benefit.

Why is he contributing £300/month and paying all the running expenses?

Maybe the £300/month should be a deduction on cost not on car benefit? I think I've got this question wrong. I took £300/month away from car benefit not cost.

ayna

Thanks a lot reader. I didn't calculate the fuel as well as I thought the employee was paying for the fuel. But when I left the college it just stroke my mind, what was actually said in the task...
As to 300 contributions per month.... first I deducted it from the list price, but then I changed it to:
34,800*25%=8,700
less 300*12=3,600
8,700-3,600=5100

reader

I also calculated £5100

Why is the employee paying for all running costs and contributing £300/month?

mickeymacca

He is not contributing the £300 toward the running costs, forget about the running costs. He is contributing it to having a car allowance, but just making regular (revenue) payments rather than paying off a lump sum (capital) payment. Although I can't rememeber the figures involved the method you have both used is spot on......

reader

I think his employer makes employees:

1) Pay £300/month if they have a company car, and
2) Pay for any running expenses

Seems reasonable given that he didn't pay for the car in the first place....

SusieQtips

Ptc

Can someone help me with a question?

Working on 2009/10 tax year, an employee has a £10,000 loan from his employer on 1 Dec 2008. The interest rate is 2%. HMRC interest rate is 6.25%.
On 1 Dec 2009 the employee repays £6000 of this loan.
How much is his benefit in kind?

I am totally clueles with this. I know usually you work out what the interest is is at 6.25% then work out what it is at 2% then the difference (time apportioned) is the benefit in kind. What totally threw me was the repayment because this left a loan outstanding of £4,000.(Loan then less than £5,000) I tried various workings out, ignoring the £4,000 outstanding, time apportioning the £6,000 and £4,000 (assuming cus the original loan was £10,000) and various other methods but none of my answers were the same as the 4 that were given, so I had to make a wild guess.

I've looked in the text book (Osborne) and there is no mention of a part loan being repayed.

Out of interest cus it's too late now (will come in useful for the resit) how do you work out the amount of benefit in kind and how much is it?

reader

I think the answer is as follows:

At the beginning of the year the liability is £10,000

At the end of the year the liability is £4,000 (£10,000 minus the £6,000 repayment)

Using the average method formula (Kaplan PTC book, FA09, page 34)

Loan benefit = 1/2 x (balance outstanding at beginning of year + balance outstanding at end of year) x ORI

Loan benefit = 1/2 (10,000 + 4,000) x 6.25%

Loan benefit = 1/2 (14,000) x 6.25

Loan benefit = £437.50

However the employee has aleady contributed 2%:

Employee contribution = 1/2 (10,000 + 4,000) x 0.02

Employee contribution = £140

Loan benefit = Calculated loan benefit - contribution

Loan benefit = 437.50 - 140

Loan benefit = £297.50 (ANSWER?)

SusieQtips

reader wrote: »

I think the answer is as follows:

At the beginning of the year the liability is £10,000

At the end of the year the liability is £4,000 (£10,000 minus the £6,000 repayment)

Using the average method formula (Kaplan PTC book, FA09, page 34)

Loan benefit = 1/2 x (balance outstanding at beginning of year + balance outstanding at end of year) x ORI

Loan benefit = 1/2 (10,000 + 4,000) x 6.25%

Loan benefit = 1/2 (14,000) x 6.25

Loan benefit = £437.50

However the employee has aleady contributed 2%:

Employee contribution = 1/2 (10,000 + 4,000) x 0.02

Employee contribution = £140

Loan benefit = Calculated loan benefit - contribution

Loan benefit = 437.50 - 140

Loan benefit = £297.50 (ANSWER?)

Thank you for that
I've never heard of the average method formula, we use Osborne books and there is nothing in there about it, so didn't stand a chance with that question. I recognise the 2 figures you have, as 2 of the 4 answers, like I said I took a wild guess and went with the £340 figure, so no chance of any marks on that one.