Sample assessment 1 task 1.3
Needhelp101
Registered Posts: 1
in Personal Tax
Hello,
Could someone please help with the workings for the question relating to Jules?
Thanks.
Could someone please help with the workings for the question relating to Jules?
Thanks.
0
Answers

CornishPixie Registered, MAAT, AATQB, AAT Licensed Accountant Posts: 117 Dedicated contributor 🌟 🐵 🌟Ok, I would approach this as follows:
The basic charge must be the higher of the annual value or the rent paid by the employer. There is no rent mentioned so the basic charge will be £6,900.
The value of the property is termed 'expensive' accommodation as it cost over £75,000. So the calculation would be £236,000  £75,000 = £161,000. Multiply this by the HMRC official rate which I believe is 2.5% gives you a calculation of £236,000  £75,000 = £161,000 x 2.5% = £4,025
Add this to the basic charge: £6,900 + £4,025 = £10,925 but Jules was only in the accommodation from 1 August so that's only 8 months so x 8/12 = £7,283.33
Now we need to take off the contribution paid by Jules. He only occupied the property from 1 August so it's only 8 months = £500 x 8 = £4,000
£7,283.33  £4,000 = £3,283
So the full calculation would look like this: (£6,900 + 2.5% (£236,000 – £75,000)) × 8/12 = £7,283.33  £4,000 = £3,283.33 or £3,283 in rounded pounds.
Bear in mind that slightly different rules apply if the house had been purchase more than 6 years prior to the person moving in but that's not relevant in this scenario.
Hope that helps.0 
CornishPixie Registered, MAAT, AATQB, AAT Licensed Accountant Posts: 117 Dedicated contributor 🌟 🐵 🌟Amend my answer above as Jules moved in to the property in August 2015 and this question relates to the 2018/19 tax year so, therefore, there would NOT be a prorating of the amounts. So the calculation will be:
(£6,900 (basic cost) + 2.5% (£236,000 – £75,000)) = £10,925  £6,0000 (rent paid by Jules) = £4,925.
See how easy it is to miss information in the question!0
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