AAT Level 4 Personal tax Assessment 1 task 1.3

Sentinel

Hi, im finding it difficult to understand how to work out the following questions -

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

"Margaret received a watch as her 25 year long service award. This was Margarets first long service award and the watch cost Clartt Ltd £1450"

Please can somebody get back to me on this ASAP.

Many thanks -
Sentinel

JSmith

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

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.


"Margaret received a watch as her 25 year long service award. This was Margarets first long service award and the watch cost Clartt Ltd £1450"

She can get £50 per year of service. 25 years x £50 = £1,250.
£1,450 - £1,250 = £200 taxable benefit.

Sentinel

JSmith said:

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

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.


"Margaret received a watch as her 25 year long service award. This was Margarets first long service award and the watch cost Clartt Ltd £1450"

She can get £50 per year of service. 25 years x £50 = £1,250.
£1,450 - £1,250 = £200 taxable benefit.

Thank you so much! I was stuck on this question for so long.