On 6 April 2020 Dave Smith, born July 1975, commenced employment with Benze Ltd as a sales manager. On 1 October 2020 he commenced in business running a tea shop, preparing accounts to 31 May. The following information is available for the tax year 2020/21:

          Employment

1. During the tax year 2020/21 Dave was paid a gross annual salary of £43,000.
2. During the period 1 October 2020 to 5 April 2021 Benze provided Dave with a diesel powered company car , (non RDE 2 compliant) registered March 2020 with a list price of £22,150.The official CO2   emission rate for the car is 121 grams per kilometre. Benze paid for all of the motor car’s running costs of £2,400 during that period including petrol used for private journeys. Dave pays B plc £30 per month for the use of the motor car

         

          Tea shop Business

          (1)       The business had a tax adjusted trading profit for the eight-month period ended 31 May 2021 of £95,000. This figure is before taking account of capital allowances.

          (2)       The only item of plant and machinery owned by the business is a motor car that cost £22,100 on 1 January 2021. The motor car has a CO2 emission rate of 132 grams per kilometre.

          Property income

          (1)       Dave owns a freehold house which is let out furnished. The property was let throughout the tax year 2020-21 at a monthly rent of £3,200.

          (2)       During the tax year 2020-21 Dave paid council tax of £2,520 in respect of the property,

          (3)       He spent £900 on replacing a damaged fridge . A fridge of a similar quality to the one replaced cost £400.

                    

Required:

          (a)       Calculate Dave Smith’s taxable income for the tax year 2020-21

                                                                                                                                                       

          (b)       Advise as to what classes of national insurance contribution will be paid in respect of Dave Smith’s income for the tax year 2020/21, and in each case who is responsible for paying them.

                      Note: You are not required to calculate the actual national insurance contributions.            

                     

          (c)       (i) Advise as to when income is taxable for directors and other employees                                                                             

                      (ii) “ The government’s policies do not encourage individuals to support charities“.

                      Explain this statement

                        Note:Assume that the official rate of interest is 2.5%