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Assignment Title Income Tax computation, Rental and Employment, and Self-employment Income, Capital Gain Tax and Oman Tax Law

Question no.3: Arun started a business as an electrical goods dealer on 1 January 2015. He prepared his Profit and Loss Account for the year ended 31 March 2021 and its shows a net profit of 180,000. Notes: 1. The profit of 180,000 is calculated after adding the following other incomes: a) Rental Income 5,000 b) Interest Income 2,000 Profit on sale of his house 4,000 and d) Dividend income of 6,000 2. The net profit of 180,000 is calculated after deducting various expenses as shown below: a) Depreciation of 12,000 b) Salary of 8,000, which includes salary withdrawn by Arun 2,000 Interest on loan borrowed for business purposes 3,000 and personal purposes 1,000 d) Donation to National charity 600, Local Charity 50 and political donation 200. e) Subscription for business association 400 and his club membership fees 550. f) Expenses relating to Gift and Entertainment: (1) The gift to staff 100 (u) Entertainment to staff 200 (H) Gift of chips packets costing 2 each to 1000 customers (iv) Gift of juice costing 5 each for 200 staffs = () Gift of watch set costing 70 each to 10 customers. 9) Bad debts written off include 500 normal trade debt, 300 customer's loan, and 400 loan given to the former employee h) : h) Repairs and maintenance include the following: (1) Building redecoration (painting) 750 (11) Purchase of plant and machinery 1,000 1) Other expenses deducted include payment contrary to public policy (bribe) 200, Staff parking fine of 20, the penalty for irregularity in the payment of tax 500. j) Arun uses the business car for his personal use. 40% of the car expense of 5,000 is assumed as personal. k) Arun has taken one car on a rental basis for business use. The annual rent of the car is 3,000. The CO emission of the car is 120 g km 1) Arun has calculated the capital allowances as 20.000 for the year ended 31 March 2021. 3. The business had a trading loss of 23,000 for the year ended 31 March 2020 and it has not been adjusted against any other income Required: a) Calculate the adjusted trading Profit of Arun for the year ended 31 March 2021 after adjusting the brought forward trading loss. (9 marks) b) Calculate the Class 2 and 4 NIC for the business of Arun. (1 mark) .) Arun has calculated the tax liability for the tax year 2020/21 as 25,000. Assume that for the tax year 2020/21, he filed his . , return on 31 August 2022. Explain the penalty procedures for the delay in filing the return and also, calculate the penalty for Arun. (max. 100 words) (2 mark) Total marks = 12 Question 4: (Presentation) Recently, Amur has joined a large UK company as a manager. His employment contracts provide him various benefits such as free accommodation, company car, free parking space, childcare benefit, etc. Also, many times he has to spend his own for the business travel. Because of Covid, he has to work from home and he spent various expenses at home for business purposes. He contributes to the Occupation pension scheme and his employer also contributes for the same. He subscribes to a professional body, which is relating to developing his personal attitude, Prepare a presentation showing the various expenses deductible and benefits exempts while calculating employment income. a 5 ) (5 marks) (This question is for presentation. Prepare a presentation with 5 to 8 slides. The marks are to be allotted for the delivery, method, structure, and content of the presentation. Please refer to the attached rubrics) Marks allocation: 1.25 each for delivery, method, structure, and content = 5 marks) , ) TAX RATE AND ALLOWANCES FOR THE TAX YEAR 2020/21 Income Tax Rate: N.S Saving (Other Income Dividend Income 20% 20% 7.5% 0 to 37,500 (basic rate band) 37,501 to 150,000 (higher rate band) 40% 40% 32.5% 45% 45% 38.1% above 150,000 (Additional rate) First 2000 dividend income is taxable at 0% Personal Allowance 12,500 The expensive Accommodation benefit limit is 75,000 The official Rate of Interest is 2.25% Statutory limit for Mileage allowance of Motor Car- 45p per mile for first 10,000 miles 25p per mile for more than 10.000 miles For Car Benefit Car benefits CO2 emission per Km 51 10 54 gms 55 gms Petrol car % Diesel Car 13% 17% 14% 18% An additional 1% is added to the 14% or 18% up to a maximum of 37% Each complete additional 5 grams emission above 55gms Electric Car 0% For Fuel Benefit: The base figure is 24.500 Class 2 NIC = 3.05 per week Class 4 NIC 1 to 9.500 9.501 to 50,000 above 50,000 Nil 9% 2% Question no.2: Raja and Rani are husband and wife, both are residing in the UK. For the tax year 2020/21, Raja has the following incomes: Employment Income 80,000 Interest from Bank 40,000 He has no other income during the tax year. Rani is a housewife, she had no income during the tax year 2020/21. Raja and Rani heard something about tax planning to reduce tax liability. The tax planning may be Raja alone can do himself by shifting his interest income or he can reduce his tax by sharing his income with his wife. But even after discussing each other, they are unable to conclude how to reduce the tax As a tax advisor, Advice Raja: a) how he can reduce his tax by shifting his investment in his own and b) which income he can shift to his wife so that they can reduce the overall tax Substantiate your advice with the help of Tax calculations. (400 words) (5 marks) Question no.3: Arun started a business as an electrical goods dealer on 1 January 2015. He prepared his Profit and Loss Account for the year ended 31 March 2021 and its shows a net profit of 180,000. Notes: 1. The profit of 180,000 is calculated after adding the following other incomes: a) Rental Income 5,000 b) Interest Income 2,000 Profit on sale of his house 4,000 and d) Dividend income of 6,000 2. The net profit of 180,000 is calculated after deducting various expenses as shown below: a) Depreciation of 12,000 b) Salary of 8,000, which includes salary withdrawn by Arun 2,000 Interest on loan borrowed for business purposes 3,000 and personal purposes 1,000 d) Donation to National charity 600, Local Charity 50 and political donation 200. e) Subscription for business association 400 and his club membership fees 550. f) Expenses relating to Gift and Entertainment: (1) The gift to staff 100 (u) Entertainment to staff 200 (H) Gift of chips packets costing 2 each to 1000 customers (iv) Gift of juice costing 5 each for 200 staffs = () Gift of watch set costing 70 each to 10 customers. 9) Bad debts written off include 500 normal trade debt, 300 customer's loan, and 400 loan given to the former employee h) : h) Repairs and maintenance include the following: (1) Building redecoration (painting) 750 (11) Purchase of plant and machinery 1,000 1) Other expenses deducted include payment contrary to public policy (bribe) 200, Staff parking fine of 20, the penalty for irregularity in the payment of tax 500. j) Arun uses the business car for his personal use. 40% of the car expense of 5,000 is assumed as personal. k) Arun has taken one car on a rental basis for business use. The annual rent of the car is 3,000. The CO emission of the car is 120 g km 1) Arun has calculated the capital allowances as 20.000 for the year ended 31 March 2021. 3. The business had a trading loss of 23,000 for the year ended 31 March 2020 and it has not been adjusted against any other income Required: a) Calculate the adjusted trading Profit of Arun for the year ended 31 March 2021 after adjusting the brought forward trading loss. (9 marks) b) Calculate the Class 2 and 4 NIC for the business of Arun. (1 mark) .) Arun has calculated the tax liability for the tax year 2020/21 as 25,000. Assume that for the tax year 2020/21, he filed his . , return on 31 August 2022. Explain the penalty procedures for the delay in filing the return and also, calculate the penalty for Arun. (max. 100 words) (2 mark) Total marks = 12 Question 4: (Presentation) Recently, Amur has joined a large UK company as a manager. His employment contracts provide him various benefits such as free accommodation, company car, free parking space, childcare benefit, etc. Also, many times he has to spend his own for the business travel. Because of Covid, he has to work from home and he spent various expenses at home for business purposes. He contributes to the Occupation pension scheme and his employer also contributes for the same. He subscribes to a professional body, which is relating to developing his personal attitude, Prepare a presentation showing the various expenses deductible and benefits exempts while calculating employment income. a 5 ) (5 marks) (This question is for presentation. Prepare a presentation with 5 to 8 slides. The marks are to be allotted for the delivery, method, structure, and content of the presentation. Please refer to the attached rubrics) Marks allocation: 1.25 each for delivery, method, structure, and content = 5 marks) , ) TAX RATE AND ALLOWANCES FOR THE TAX YEAR 2020/21 Income Tax Rate: N.S Saving (Other Income Dividend Income 20% 20% 7.5% 0 to 37,500 (basic rate band) 37,501 to 150,000 (higher rate band) 40% 40% 32.5% 45% 45% 38.1% above 150,000 (Additional rate) First 2000 dividend income is taxable at 0% Personal Allowance 12,500 The expensive Accommodation benefit limit is 75,000 The official Rate of Interest is 2.25% Statutory limit for Mileage allowance of Motor Car- 45p per mile for first 10,000 miles 25p per mile for more than 10.000 miles For Car Benefit Car benefits CO2 emission per Km 51 10 54 gms 55 gms Petrol car % Diesel Car 13% 17% 14% 18% An additional 1% is added to the 14% or 18% up to a maximum of 37% Each complete additional 5 grams emission above 55gms Electric Car 0% For Fuel Benefit: The base figure is 24.500 Class 2 NIC = 3.05 per week Class 4 NIC 1 to 9.500 9.501 to 50,000 above 50,000 Nil 9% 2% Question no.2: Raja and Rani are husband and wife, both are residing in the UK. For the tax year 2020/21, Raja has the following incomes: Employment Income 80,000 Interest from Bank 40,000 He has no other income during the tax year. Rani is a housewife, she had no income during the tax year 2020/21. Raja and Rani heard something about tax planning to reduce tax liability. The tax planning may be Raja alone can do himself by shifting his interest income or he can reduce his tax by sharing his income with his wife. But even after discussing each other, they are unable to conclude how to reduce the tax As a tax advisor, Advice Raja: a) how he can reduce his tax by shifting his investment in his own and b) which income he can shift to his wife so that they can reduce the overall tax Substantiate your advice with the help of Tax calculations. (400 words)