Personal tax practice assessement 2 Task 2

John_C

Hi everyone

https://us.v-cdn.net/5021951/uploads/editor/lc/l33vhej0u7tf.jpg
I can't understand why the answer of the tax benefit on the provision of the car is £1640.
(60000-4000)*0.08*6/12 shouldn't it be 2240?

As I can't figure out the reason behind this, I tried to analyze the answer 1640/0.08/*12/6 = £41000 but even if I sum up all the figures, the List Price - Contribution couldn't be 41000 so I would like to know the reason behind this answer.

John_C

I just figured out the answer from the gov website

Find the price of the car (paragraph 12.4).
Add the price of any accessories which fall to be taken into account (paragraph 12.8).
Make any required deductions for capital contributions by the employee (paragraph 12.16).
Find the appropriate percentage for the car (paragraph 12.22).
Multiply the figure at Step 3 by the appropriate percentage at Step 4 (paragraph 12.31).
Make any required deduction for periods when the car was unavailable (paragraph 12.34).
Make any required deduction for payments by the employee for private use of the car (paragraph 12.36).
Make any required adjustment where the car is shared (paragraph 12.38).

so it should be 2240-(6*100) = 1640

skandwm15

I've tried it on the gov website but got a completely different answer but I've managed to work it back from your figure.

List Price £60,000 - £4,000 employee contribution towards cost of the car = £56,000
£56,000 /12 x 6 months available = £28,000
£28,000 x 8% scale charge = £2,240
£2,240 - (£100 x 6 months employee cont) = £1,640