Question 4 Throughout 2021/22 Roman was employed by Citrus Ltd. His remuneration package was as follows: 1) His annual salary was 58,000. il) He was provided with a company car throughout the year. The petrol car was first provided in March 2020, had a list price of 27,000 and has CO2 emissions of 129g/km. He uses the car for both business and personal use and made a payment of 1.200 towards the running costs of the car. His employer pays the costs of fuel for private use 1) Throughout the year he was provided with a mobile phone at an annual cost to his employer of 600. Roman uses this phone for some private calls. IV) Roman's daughter attends the Citrus workplace nursery, and no charge is made for this. If she attended a similar nursey in the town the cost would be 300 per month V) Roman is covered by private health insurance arranged by Citrus Ltd, for which he makes no contribution. This insurance costs Citrus Ltd 1,200 per annum. VI) Roman and his wife are able to use the in-house gym at their employer's premises: annual membership at a similar local gym costs 600 per person per annum vii) His employer made an interest-free loan to him of 20,000 on 1 October 2021. This loan remains outstanding and Roman will start to repay it in 2022/232 vii) In December Citrus Ltd sent a bouquet of flowers to Roman's wife as she had been hospital. The bouquet cost 95. Assume the official rate of interest is 2.75% Required: a) Show the taxable value of each of the elements of Roman's remuneration package and calculate the total chargeable employment income for income tax purposes received from Citrus Lid 18 marks b) Explain the income tax treatment of redundancy payments, explaining the difference between the treatment of statutory redundancy payments and ex-gratia redundancy payments 5 marks c) Explain the income tax rules that apply if an employer provides health screening and medical check-ups for its employees 2 marks Question 4 Throughout 2021/22 Roman was employed by Citrus Ltd. His remuneration package was as follows: 1) His annual salary was 58,000. il) He was provided with a company car throughout the year. The petrol car was first provided in March 2020, had a list price of 27,000 and has CO2 emissions of 129g/km. He uses the car for both business and personal use and made a payment of 1.200 towards the running costs of the car. His employer pays the costs of fuel for private use 1) Throughout the year he was provided with a mobile phone at an annual cost to his employer of 600. Roman uses this phone for some private calls. IV) Roman's daughter attends the Citrus workplace nursery, and no charge is made for this. If she attended a similar nursey in the town the cost would be 300 per month V) Roman is covered by private health insurance arranged by Citrus Ltd, for which he makes no contribution. This insurance costs Citrus Ltd 1,200 per annum. VI) Roman and his wife are able to use the in-house gym at their employer's premises: annual membership at a similar local gym costs 600 per person per annum vii) His employer made an interest-free loan to him of 20,000 on 1 October 2021. This loan remains outstanding and Roman will start to repay it in 2022/232 vii) In December Citrus Ltd sent a bouquet of flowers to Roman's wife as she had been hospital. The bouquet cost 95. Assume the official rate of interest is 2.75% Required: a) Show the taxable value of each of the elements of Roman's remuneration package and calculate the total chargeable employment income for income tax purposes received from Citrus Lid 18 marks b) Explain the income tax treatment of redundancy payments, explaining the difference between the treatment of statutory redundancy payments and ex-gratia redundancy payments 5 marks c) Explain the income tax rules that apply if an employer provides health screening and medical check-ups for its employees 2 marks
