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can someone help with this question please ? let me know if i can add information to help! i have uploaded the tax tables. UK
can someone help with this question please ? let me know if i can add information to help!
i have uploaded the tax tables. UK tax.
i need it in UK tax law, not foreign??! i have provided the UK tax tables. is there anything else i can upload to help?
Styles Question 3 In 2019/20 Sasha earns a salary of 125,750 per annum and bank interest of 12,800 and dividends of 13,500. Sasha uses her own car to visit clients and during 2019/20 her business mileage totals 25,000 miles. Her employer reimburses her at a rate of 50p per mile. Sasha's civil partner is a higher rate taxpayer in 2019/20 but will have no source of income in 2020/21 due to a career break. Calculate Sasha's income tax liability for 2019/20 and explain what changes Sasha and her civil partner should make for the tax year 2020/21 outlining the tax savings that Sasha could achieve by making these changes. (10 marks) Tax Rates and Allowances 2019/20 Income Tax Main Personal Allowances Personal allowance Income limit for personal allowance (Note 1) Marriage allowance (Note 2) 12,500 100,000 1,250 Note 1: When income exceeds the limit a clawback applies reducing the personal allowance by 1 for every 2 above the limit. Note 2. Spouses/civil partners are able to transfer 1,250 of their unused personal allowance to their partner if both are basic rate taxpayers. Tax Rates and Taxable Bands / Normal rate Dividend rate 20% 7.5% Basic rate 0 - 37,500 Higher rate 37,501 - 150,000 40% 32.5% Additional rate Over 150,000 45% 38.1% Note 3. A personal savings allowance applies at a 0% tax rate applied after the personal allowance have been applied as follows: f Basic rate taxpayers 1,000 Higher rate taxpayers 500 Additional rate taxpayers Nil Note 3. A personal savings allowance applies at a 0% tax rate, applied after the personal allowance have been applied as follows: Basic rate taxpayers 1,000 Higher rate taxpayers 500 Additional rate taxpayers Nil Note 4: The first 2,000 of dividend income is taxed at 0% for all taxpayers. Note 5. The first 7,500 of rental income from renting part of the taxpayer's home is tax free if rent a room relief is claimed. Pension Scheme Limits Annual allowance Lifetime allowance Maximum contribution than can qualify for tax relief without earnings 40,000 1,055,000 3,600 ISA Annual Subscription Limit Overall Individual savings Accounts limit Lifetime ISA (18 to 40) Help to buy ISA 1,000 (initial maximum investment) then 200 per month 20,000 4,000 45p 25p Relevant to Employees Authorised Mileage Allowances When an employee has business usage of their own car Up to 10,000 miles Over 10,000 miles Car Benefit Percentage 0-50 g/km 51 - 75 g/km 76 - 94 g/km 95g/km (the base level of emissions) Each additional 5 g/km above the base level Diesel additional surcharge Maximum rate 16% 19% 22% 23% +1% +4% 37% Car Fuel Benefit The base figure for calculating car fuel benefits 24,100 Relevant to Traders Capital Allowances Plant and Machinery Main pool Special rate pool Energy & water efficient equipment 18% 6% 100% Motor Cars CO2 emissions up to 50 grams per kilometre CO2 emissions over 50 grams up to 110 grams per kilometre CO2 emissions over 110 grams per kilometre 100% 18% 6% Annual Investment allowance Rate of allowance Expenditure limit 100% 1,000,000 Styles Capital Gains Tax Annual exemption Standard rate of tax (assets other than residential property) Higher rate of tax (assets other than residential property) Standard rate of tax on residential property Higher rate of tax on residential property 12,000 10% 20% 18% 28% Entrepreneurs' relief: For trading businesses and companies held for at least one year (minimum 5% employee shareholding) Lifetime limit of gains Rate of tax 10,000,000 10% Lease Premium Formulae Capital proportion is 2% (n-1) P Chattels Formulae Gains restricted to 5/3(gross proceeds - 6,000) National Insurance (not contracted-out rates) Primary Class 1 employees 0 - 8,632 per year Above 8,632 - 50,000 per year Above 50,000 per year Secondary Class 1 employer 0 - 8,632 per year Above 8,632 per year % Nil 12.0 2.0 Nil 13.8 ---- Paragraph Class 1 employer O - 8,632 per year Above 8,632 per year Styles Nil 13.8 Class 1A employer On benefits in kind 13.8 Sole traders Class 2 Paid weekly If earnings are above the small profits threshold of 6,365 pa 3pw Class 4 0 - 8,632 per year Above 8,632 - 50,000 per year Above 50,000 per year Nil 9.0 2.0 Rates of Interest Official rate of interest for benefits in kind Rate of interest on underpaid tax Rate of interest on overpaid tax 2.50% 3.25% 0.50% Supplementary Instructions 1. You should assume that the tax rates and allowances for the tax year 2019/20 will continue to apply for the foreseeable future unless you are instructed otherwise. 2. Calculations and workings need only be made to the nearest . All apportionments should be made to the nearest Income Tax Computation Proforma for 2018/19 Savings Dividends Total Non savings Ren Trading income (CYB) X Employment income received X Savings income interest received) I X Dividend income (amount received.) X X Property income (accruals) X Net income X X X Less personal allowance (X) cx) (X) (11.850) Taxable income Income Tax Rates On non-savings income At 20% then 40% then 45% On savings income (apply note 4) At 0% then 20% then 40% then 45% On dividends (apply note 3) At 0% then 7.5% then 32.5% then 38.1% Income tax liability for the vaar Income Tax Rates x On non-savings income At 20% then 40% then 45% On savings income (apply note 4) At 0% then 20% then 40% then 45% On dividends (apply note 3) At 0% then 7.5% then 32.5% then 38.1% X x Income tax liability for the year Less: PAYE tax deducted Payments on Account (X) (X) Income tax due by self-assessment 31/01/20 X Styles Question 3 In 2019/20 Sasha earns a salary of 125,750 per annum and bank interest of 12,800 and dividends of 13,500. Sasha uses her own car to visit clients and during 2019/20 her business mileage totals 25,000 miles. Her employer reimburses her at a rate of 50p per mile. Sasha's civil partner is a higher rate taxpayer in 2019/20 but will have no source of income in 2020/21 due to a career break. Calculate Sasha's income tax liability for 2019/20 and explain what changes Sasha and her civil partner should make for the tax year 2020/21 outlining the tax savings that Sasha could achieve by making these changes. (10 marks) Tax Rates and Allowances 2019/20 Income Tax Main Personal Allowances Personal allowance Income limit for personal allowance (Note 1) Marriage allowance (Note 2) 12,500 100,000 1,250 Note 1: When income exceeds the limit a clawback applies reducing the personal allowance by 1 for every 2 above the limit. Note 2. Spouses/civil partners are able to transfer 1,250 of their unused personal allowance to their partner if both are basic rate taxpayers. Tax Rates and Taxable Bands / Normal rate Dividend rate 20% 7.5% Basic rate 0 - 37,500 Higher rate 37,501 - 150,000 40% 32.5% Additional rate Over 150,000 45% 38.1% Note 3. A personal savings allowance applies at a 0% tax rate applied after the personal allowance have been applied as follows: f Basic rate taxpayers 1,000 Higher rate taxpayers 500 Additional rate taxpayers Nil Note 3. A personal savings allowance applies at a 0% tax rate, applied after the personal allowance have been applied as follows: Basic rate taxpayers 1,000 Higher rate taxpayers 500 Additional rate taxpayers Nil Note 4: The first 2,000 of dividend income is taxed at 0% for all taxpayers. Note 5. The first 7,500 of rental income from renting part of the taxpayer's home is tax free if rent a room relief is claimed. Pension Scheme Limits Annual allowance Lifetime allowance Maximum contribution than can qualify for tax relief without earnings 40,000 1,055,000 3,600 ISA Annual Subscription Limit Overall Individual savings Accounts limit Lifetime ISA (18 to 40) Help to buy ISA 1,000 (initial maximum investment) then 200 per month 20,000 4,000 45p 25p Relevant to Employees Authorised Mileage Allowances When an employee has business usage of their own car Up to 10,000 miles Over 10,000 miles Car Benefit Percentage 0-50 g/km 51 - 75 g/km 76 - 94 g/km 95g/km (the base level of emissions) Each additional 5 g/km above the base level Diesel additional surcharge Maximum rate 16% 19% 22% 23% +1% +4% 37% Car Fuel Benefit The base figure for calculating car fuel benefits 24,100 Relevant to Traders Capital Allowances Plant and Machinery Main pool Special rate pool Energy & water efficient equipment 18% 6% 100% Motor Cars CO2 emissions up to 50 grams per kilometre CO2 emissions over 50 grams up to 110 grams per kilometre CO2 emissions over 110 grams per kilometre 100% 18% 6% Annual Investment allowance Rate of allowance Expenditure limit 100% 1,000,000 Styles Capital Gains Tax Annual exemption Standard rate of tax (assets other than residential property) Higher rate of tax (assets other than residential property) Standard rate of tax on residential property Higher rate of tax on residential property 12,000 10% 20% 18% 28% Entrepreneurs' relief: For trading businesses and companies held for at least one year (minimum 5% employee shareholding) Lifetime limit of gains Rate of tax 10,000,000 10% Lease Premium Formulae Capital proportion is 2% (n-1) P Chattels Formulae Gains restricted to 5/3(gross proceeds - 6,000) National Insurance (not contracted-out rates) Primary Class 1 employees 0 - 8,632 per year Above 8,632 - 50,000 per year Above 50,000 per year Secondary Class 1 employer 0 - 8,632 per year Above 8,632 per year % Nil 12.0 2.0 Nil 13.8 ---- Paragraph Class 1 employer O - 8,632 per year Above 8,632 per year Styles Nil 13.8 Class 1A employer On benefits in kind 13.8 Sole traders Class 2 Paid weekly If earnings are above the small profits threshold of 6,365 pa 3pw Class 4 0 - 8,632 per year Above 8,632 - 50,000 per year Above 50,000 per year Nil 9.0 2.0 Rates of Interest Official rate of interest for benefits in kind Rate of interest on underpaid tax Rate of interest on overpaid tax 2.50% 3.25% 0.50% Supplementary Instructions 1. You should assume that the tax rates and allowances for the tax year 2019/20 will continue to apply for the foreseeable future unless you are instructed otherwise. 2. Calculations and workings need only be made to the nearest . All apportionments should be made to the nearest Income Tax Computation Proforma for 2018/19 Savings Dividends Total Non savings Ren Trading income (CYB) X Employment income received X Savings income interest received) I X Dividend income (amount received.) X X Property income (accruals) X Net income X X X Less personal allowance (X) cx) (X) (11.850) Taxable income Income Tax Rates On non-savings income At 20% then 40% then 45% On savings income (apply note 4) At 0% then 20% then 40% then 45% On dividends (apply note 3) At 0% then 7.5% then 32.5% then 38.1% Income tax liability for the vaar Income Tax Rates x On non-savings income At 20% then 40% then 45% On savings income (apply note 4) At 0% then 20% then 40% then 45% On dividends (apply note 3) At 0% then 7.5% then 32.5% then 38.1% X x Income tax liability for the year Less: PAYE tax deducted Payments on Account (X) (X) Income tax due by self-assessment 31/01/20 X Step by Step Solution
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