C1- During the 12 -month accounting period ended 31st December a company employed building contractors to carry out the following work: - Installation of air conditioning throughout office 24,500(5%) - Reinforcement of flooring to be strong enough to install heavy machines 3,500(5%) - Repairs to entrance doors 1,800(5%) Required: Explain the tax treatment of each of the above items of expenditure. You do not need to calculate capital allowances but, if relevant, these should be explained together with any other reliefs. (15\%) TABLE OF 2021/22 TAX RATES AND ALLOWANCES The current rates and allowances for income tax, corporation tax, capital gains tax, inheritance tax and other taxes are set out below. Income tax rates 0% rate on savings only available up to 5,000 of savings income if non-savings income does not exceed this sum. In addition, a 1,000 personal savings allowance is available to basic rate taxpayers ( 500 for higher rate and nil for additional rate taxpayers). "Dividend allowance of 2.000 (unchanged from 2020/21) ** These rates apply in England, Wales and Northem Ireland only. Scottish IT rates: 12,097=19%,2,09812,726=20%,12,72731,092=21%, 31,093150,000=41%, over 150,000=46% Income tax reliefs and incentives: annual limits Approved mileage rates Excess payments over these rates are taxable. Shortfalls can be claimed as tax relief by the employee. If the employee carries another employee in their own car or van on a business journey, and additional tax-free payment of 5p per mile applies. Car and fuel benefits in kind (Round reported CO2g/km down to find the correct percentage) Company car benefit charge (registered before 6 April 2020 - NEDC - non-hybrid): Company car benefit charge (registered after 6 April 2020 - WLTP - non-hybrid): Company car benefit charge (hybrid cars with CO2250K 925K=5% (above this normal rates apply). Annual Tax on Enveloped Dwellings Uver I ou, unu 1. 4% supplement on additional dwelling purchased over 40,000. LBTT relief for 1st time purchasers up to 175,000. Non-residential property (on or after 25 Jan 19) Welsh Land Transaction Tax 1. 4% supplement on additional dwelling ( 3% before 22 December 20) ** LBTT relief for 1st time purchasers up to 175,000. Effective 27 July 20 to 30 June 21 reduced rates apply for purchases up to 250K=0%, (above rates apply thereafter) Insurance Premium Tax: Standard Higher Ra vehicles) Air Passenger Duty: Uver I ou, unu 1. 4% supplement on additional dwelling purchased over 40,000. LBTT relief for 1st time purchasers up to 175,000. Non-residential property (on or after 25 Jan 19) Welsh Land Transaction Tax 1. 4% supplement on additional dwelling ( 3% before 22 December 20) ** LBTT relief for 1st time purchasers up to 175,000. Effective 27 July 20 to 30 June 21 reduced rates apply for purchases up to 250K=0%, (above rates apply thereafter) Insurance Premium Tax: Standard Higher Ra vehicles) Air Passenger Duty: HMRC interest rates (These rates change occasionally - see the HMRC website for details) Duty rates Duty Typical Item C1- During the 12 -month accounting period ended 31st December a company employed building contractors to carry out the following work: - Installation of air conditioning throughout office 24,500(5%) - Reinforcement of flooring to be strong enough to install heavy machines 3,500(5%) - Repairs to entrance doors 1,800(5%) Required: Explain the tax treatment of each of the above items of expenditure. You do not need to calculate capital allowances but, if relevant, these should be explained together with any other reliefs. (15\%) TABLE OF 2021/22 TAX RATES AND ALLOWANCES The current rates and allowances for income tax, corporation tax, capital gains tax, inheritance tax and other taxes are set out below. Income tax rates 0% rate on savings only available up to 5,000 of savings income if non-savings income does not exceed this sum. In addition, a 1,000 personal savings allowance is available to basic rate taxpayers ( 500 for higher rate and nil for additional rate taxpayers). "Dividend allowance of 2.000 (unchanged from 2020/21) ** These rates apply in England, Wales and Northem Ireland only. Scottish IT rates: 12,097=19%,2,09812,726=20%,12,72731,092=21%, 31,093150,000=41%, over 150,000=46% Income tax reliefs and incentives: annual limits Approved mileage rates Excess payments over these rates are taxable. Shortfalls can be claimed as tax relief by the employee. If the employee carries another employee in their own car or van on a business journey, and additional tax-free payment of 5p per mile applies. Car and fuel benefits in kind (Round reported CO2g/km down to find the correct percentage) Company car benefit charge (registered before 6 April 2020 - NEDC - non-hybrid): Company car benefit charge (registered after 6 April 2020 - WLTP - non-hybrid): Company car benefit charge (hybrid cars with CO2250K 925K=5% (above this normal rates apply). Annual Tax on Enveloped Dwellings Uver I ou, unu 1. 4% supplement on additional dwelling purchased over 40,000. LBTT relief for 1st time purchasers up to 175,000. Non-residential property (on or after 25 Jan 19) Welsh Land Transaction Tax 1. 4% supplement on additional dwelling ( 3% before 22 December 20) ** LBTT relief for 1st time purchasers up to 175,000. Effective 27 July 20 to 30 June 21 reduced rates apply for purchases up to 250K=0%, (above rates apply thereafter) Insurance Premium Tax: Standard Higher Ra vehicles) Air Passenger Duty: Uver I ou, unu 1. 4% supplement on additional dwelling purchased over 40,000. LBTT relief for 1st time purchasers up to 175,000. Non-residential property (on or after 25 Jan 19) Welsh Land Transaction Tax 1. 4% supplement on additional dwelling ( 3% before 22 December 20) ** LBTT relief for 1st time purchasers up to 175,000. Effective 27 July 20 to 30 June 21 reduced rates apply for purchases up to 250K=0%, (above rates apply thereafter) Insurance Premium Tax: Standard Higher Ra vehicles) Air Passenger Duty: HMRC interest rates (These rates change occasionally - see the HMRC website for details) Duty rates Duty Typical Item