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1. Ebony is the sole shareholder of Solutions Ltd. She has had a good year and has profits before tax of 56,000 that could

1. Ebony is the sole shareholder of Solutions Ltd. She has had a good year and has profits before tax of £56,000that could p 

1. Ebony is the sole shareholder of Solutions Ltd. She has had a good year and has profits before tax of 56,000 that could pay her either a bonus or a dividend. If she took a bonus, the 56,000 would include any employers NIC. Ebony has already been paid a salary of 62,000 and is a higher rate taxpayer. Required: Calculate how much Ebony would receive under each option net of all relevant taxes and make a recommendation. (5 marks) 2. Analyse how governments may try to discourage tax evasion effectively whilst allowing legitimate tax planning giving examples. Marks will be awarded for relevant citations. (15 marks) (Total 20 marks)

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Answer 1 Employer NIC of Ebony is taxable Since the amount is above the upper earning limit of 50270 per year her bonus of 56000 would be taxed at 138... blur-text-image

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