Personal Tax Computations
chelvin
Registered Posts: 12 New contributor 🐸
Can anyone help me answer a question on a Tax Computation please....
The computation says
The company will provide Tom with a new 1400cc Car Costing £19,500 which is primaruly for his personal use. Peotrol for private use will be provided but Tom must make a contribution of £500 per year towards its cost.
Advise Tom of the taxiation implications of his employment package as it stands with illustrative figures.
The computation says
The company will provide Tom with a new 1400cc Car Costing £19,500 which is primaruly for his personal use. Peotrol for private use will be provided but Tom must make a contribution of £500 per year towards its cost.
Advise Tom of the taxiation implications of his employment package as it stands with illustrative figures.
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Comments
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List Price of Car = 19500
This car has a 1400cc engine size but no approved figure of CO2 emmission so use this tax table:
0 - 1,400cc 15%
1,401 - 2,000cc 25%
2,001cc+ 35%
So for the tax charge on his car it's:
19500 x 15% = 2925
"Petrol is provided for private use" so he needs to be charged on petrol:
14400 x 15% = 2160
So Total Benefits = 2160+ 2925 = 5085 must be added to his Employment Income so far.
He pays £500 towards the car costs so this needs to be deducted from his Employment income.
So In Summary:
If tom earns amount x per year then he needs to add 5085 of benefits and deduct 500 of deductions towards the cost of the car so his total assessable employment income is (x + 5085 - 500)0 -
Just a little query on that answer RE the £500 contribution you have deducted. As I read the question, the £500 is a fuel contribution and therefore not allowable as a deduction of the benefit amount.
Hope you see where I'm coming from.0 -
IIRC the £500 is irrelevant to the tax computation. Unless he pays for private fuel in full, his contribution is disregarded.
My memory on this is 3 years old but it struck me at the time that it was so unfair that I've remembered it, hopefully correctly.0
