In the tax year 2019/20, Laura worked for Sport plc until she was made redundant on 5 April 2020. Her salary for the year ended 5 April 2020 was 54,000.

She received the following redundancy package in 2019/20:

Cash payment This was the amount she was entitled to according to her employment contract (contractual payment)		30,000
Statutory redundancy payment		8,000
Company car at market value		22,000

She received the following benefits from Sport plc:

• Laura was provided with a company car with an emission rate of 105g/km. The list price when new was 28,000 and Sports plc did not pay for any diesel for the car. From 1 July 2019 to 1 September 2019, the car was in the garage being repaired and Laura could not drive the car.

• Sports plc provided the free use of sports facilities to Laura. The facilities included a swimming pool, spa and gym and yoga classes each week. The sports facilities were only available to employees of the company. An equivalent membership at a local gym would have cost Laura 1,200 per annum.

Laura paid a gift aid contribution of 3,000 a year. Laura received dividend income of 5,000 and savings income of 600.

1. Calculate Lauras income tax liability for the tax year ended 5 April 2020.

(12 marks)

2. Laura will set up in business on 1 January 2021 as a sole trader. Her business will make a tax trading loss after capital allowances of 40,000 for the period

1 January 2021 to 5 April 2021 and a further tax trading loss after capital allowances for the year ending 5 April 2022 of 90,000. Explain how Laura can claim tax relief for these trading losses from her sole trade business. (8 marks)