Practice Assessment 1 Task 8C

Sentinel

Hi,
How do you get the answer of £252?

"Yong a higher rate tax payer, was provided with a company car for the whole of 20/21. The car was registered on 21 March 2020. The cost of the car used in the benefit in kind computation was £31,500. It has a petrol engine and the taxable benefit in kind for 2020/21 is £5670.

If the car had been registered, and received by Yong, 10 April 2020, he would save ---"

Many thanks,
Sentinel

skandwm15

You first work out the percentage that was used to get £5,670.
£5,670 / £31,500 x 100 = 18
If the car was registered after 06/04/2020 the percentage would be 2% less. Therefore the new percentage is 16%

£31,500 x 16% = £5,040
£5,670 - £5,040 = £630

Yong is a higher rate tax payer.
£630 x 40% = £252

Sentinel

skandwm15 said:

You first work out the percentage that was used to get £5,670.
£5,670 / £31,500 x 100 = 18
If the car was registered after 06/04/2020 the percentage would be 2% less. Therefore the new percentage is 16%

£31,500 x 16% = £5,040
£5,670 - £5,040 = £630

Yong is a higher rate tax payer.
£630 x 40% = £252

Thank you so much!