FA2020 Practice Assessment 1 task 1.3

skandwm15

A television and cinema system costing Clartt Ltd £15,000 was bought for Ranjit's use on 1 September 2020.

Calculate the taxable benefit in kind.

The answer is £1,750 - Could anyone help with how this amount is reached?

JSmith

You need to time apportion the use of the cinema system. It was only used for 7 months of the tax year. £15,000 x (7/12) = £8,750. Then £8,750 x 20% = £1,750 taxable benefit.

skandwm15

Thank you!!