Payroll Help urgent

Hello everyone
After wanting to learn payroll I have the following question in a revision pack which I'm finding HMRC website a pain to use

hopefully you guy n girls can help me out x

Qu 4: tax year 2013/14

The company lends money to employee X at the start of the tax year for
the amount is for £25,000 - no interest in payable on the loan and by the end of the tax year 2013/14
no repayments have been made.
A taxable benefit has occurred

a) how would this benefit be notified to HMRC
b) what is the deadline for submitting notification
c) what is the cash equivalent amount of the benefit that employee X has received
d) if HMRC collect the tax due on this benefit by adjusting employee X tax code for a full year (taxed at 20%) by how much would her tax code be adjusted

hopefully the above is not to much trouble
huge thanks in advance

Chelle x





Comments

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderPosts: 1,461Moderator, MAAT, AAT Licensed Accountant
    edited July 2015
    Hi Chelle,

    The technical guidance for 2013-14 can be found here (chapter 17) and on the .gov.uk website for administration and deadlines.

    Which part are you having difficulty with?
  • Gem7321Gem7321 Experienced Mentor DevonPosts: 1,438MAAT, AAT Licensed Accountant
    edited July 2015
    a) P9D/P11D
    b) 6 July 2014
    c/d) What was the Official Rate of Interest for 2013/14?

  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderPosts: 1,461Moderator, MAAT, AAT Licensed Accountant
    4% ;-)
    Gem7321
  • ChelleMIPChelleMIP Posts: 4Registered
    wow thanks so much for your time

    if it is 4% how would I apply this to the questions C & D?
    is it possible to show workings so I can understand better
    so if I sound like a idiot here I have never been exposed to payroll before

    Thank you so much Marie & Gem
    x
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderPosts: 1,461Moderator, MAAT, AAT Licensed Accountant
    The cash benefit is the average amount of the loan over the tax year x the official rate of interest less any interests paid by the employee.
    In your example opening balance £25,000 closing balance £25,000 (no repayment) so average is (25,000+25,000)/2 = £25,000 x 4% = £1,000.
    This is the value of the benefit to be entered on the P11D and the employer will pay class 1A NIC on this amount at 13.8%.

    HMRC will collect the extra income tax from the employee (i.e £1,000x20% = £200) via an adjustment to his tax code. His personal allowance for the year 14-15 is £10,000 less benefits £1000 = £9,000 so the new tax code will be 900L.
    Gem7321Jawz
  • ChelleMIPChelleMIP Posts: 4Registered
    Many thank so 4% is the correct amount for 2013/14
    Using your working the new tax code would be £9440-1000= 844L ?
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderPosts: 1,461Moderator, MAAT, AAT Licensed Accountant
    £9,440 is the allowance for 2013-14 but the tax code change can only take effect the following year where the PA is £10,000.
    Jawz
  • Gem7321Gem7321 Experienced Mentor DevonPosts: 1,438MAAT, AAT Licensed Accountant
    Chelle do take time to read the question though because they are not asking for the amended tax code they are only asking how much the tax code will be adjusted by!
    MarieNoelle
  • ChelleMIPChelleMIP Posts: 4Registered
    Many thanks for everyone's help
    Just one other part I'm not 100% on and that's the following:

    TAX YEAR 2013/14 - (944L)

    On 10th July 2013, B Adams (Start date 15/03/2010 - £520 per week) advises you that he left his other job at the end of June and that the role he carries out at ABC Ltd is now his only source
    of income. He requests that you take him off his BR tax code.


    Detail what advice, if any, you would give him, and what changes, if any, you
    would make to his tax code, giving your reasons.



    many thanks
    in advance
    what a great forum this is
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