Question One: (Taxable income) (30 Marks) Sarah is employed by International ple and she is also a member of a partnership. The following is information is available in respect of the tax year 2017-2018: Employment: During the tax year 2017-2018, Sarah was paid a gross annual salary of 144,000 as a salary for her employment with Interational ple. In addition to her salary, Sarah was paid the following bonuses by International ple: Amount Date of Payment Date of Entitlement 18,200 21.400 13.700 Six-months period ended 28 February 2017 31 August 2017 28 February 2018 31 March 2017 31 August 2017 30 April 2018 20 March 2017 20 September 2017 20 March 2018 During the tax year 2017-2018 International ple provided Sarah with the following petrol powered motorcars. List Price 32.800 CO 2 emission rate 25 grams per kilometre Period provided 6 April to 31 December 2017 1 January to 5 April 2018 36,400 60 grams per kilometre Sarah was not provided with any fuel for private use. On 6 April 2017, Intemational ple provided Sarah with an interest free loan of 8,000 which she used to purchase a motor bike. No loan repayments were made during the year. Throughout the tax year 2017-18 International ple allowed Sarah private use of a home entertainment system owned by the company. The home entertainment system cost Interational plc 7,400 on 6 April 2017 During the tax year 2017-18, Sarah donated a total of 1,000 (gross) to charity under the payroll deduction scheme operated by International ple. Sarah paid an annual professional subscription of 560 which is relevant to her employment with Interational plc. Sarah also paid an annual membership fee of 1,240 to a health club which she used to entertain International ple's clients. International ple did not reimburse Sarah for either of these costs. Partnership: Sarah has been in partnership with Norma and Oprah since January 2005. The partnership's trading profit for the year ended 31 December 2017 was 4,600. Until 30 September 2017, profits were shared 40% to Sarah, 30% to Norma and 30% to Oprah. Since 1 October 2017, profits have been shared equally. Other income: During the tax year 2017-18, Sarah rented out one furnished room of her main residence, receiving rent of 9,200 for the year. No additional expenditure was incurred as a result of the letting. During the tax year 2017-18, Sarah received dividends of 440. On 30 November 2017, Sarah received interest of 1,330 on the maturity of savings certificates from NS&I (National Savings and Investments). Self-assessment tax return: Sarah always files her self-assessment tax return online on 26 December, so her tax return for the tax year 2017-18 will be filed on 26 December 2018. Because more than 80% of Sarah's tax liability is paid under PAYE, she is not required to make self-assessment payments on account. Required: (a) Calculate Sarah's taxable income for the tax year 2017-18 Note: You should indicate by the use of zero (0) any items which are not taxable or deductible. (b) (i) Advise Sarah of the deadline for making an amendment to her self-assessment tax retum for the tax year 2017-18, and state how HM Revenue and Customs (HMRC) will calculate interest if such an amendment results in additional tax becoming payable. (ii) State the latest date by which HMRC will have to notify Sarah if they intend to carry out a compliance check in respect of her self-assessment tax return for the tax year 2017-18, and (assuming the check is not made on a completely random basis) the possible reasons why such a check would be made. Question One: (Taxable income) (30 Marks) Sarah is employed by International ple and she is also a member of a partnership. The following is information is available in respect of the tax year 2017-2018: Employment: During the tax year 2017-2018, Sarah was paid a gross annual salary of 144,000 as a salary for her employment with Interational ple. In addition to her salary, Sarah was paid the following bonuses by International ple: Amount Date of Payment Date of Entitlement 18,200 21.400 13.700 Six-months period ended 28 February 2017 31 August 2017 28 February 2018 31 March 2017 31 August 2017 30 April 2018 20 March 2017 20 September 2017 20 March 2018 During the tax year 2017-2018 International ple provided Sarah with the following petrol powered motorcars. List Price 32.800 CO 2 emission rate 25 grams per kilometre Period provided 6 April to 31 December 2017 1 January to 5 April 2018 36,400 60 grams per kilometre Sarah was not provided with any fuel for private use. On 6 April 2017, Intemational ple provided Sarah with an interest free loan of 8,000 which she used to purchase a motor bike. No loan repayments were made during the year. Throughout the tax year 2017-18 International ple allowed Sarah private use of a home entertainment system owned by the company. The home entertainment system cost Interational plc 7,400 on 6 April 2017 During the tax year 2017-18, Sarah donated a total of 1,000 (gross) to charity under the payroll deduction scheme operated by International ple. Sarah paid an annual professional subscription of 560 which is relevant to her employment with Interational plc. Sarah also paid an annual membership fee of 1,240 to a health club which she used to entertain International ple's clients. International ple did not reimburse Sarah for either of these costs. Partnership: Sarah has been in partnership with Norma and Oprah since January 2005. The partnership's trading profit for the year ended 31 December 2017 was 4,600. Until 30 September 2017, profits were shared 40% to Sarah, 30% to Norma and 30% to Oprah. Since 1 October 2017, profits have been shared equally. Other income: During the tax year 2017-18, Sarah rented out one furnished room of her main residence, receiving rent of 9,200 for the year. No additional expenditure was incurred as a result of the letting. During the tax year 2017-18, Sarah received dividends of 440. On 30 November 2017, Sarah received interest of 1,330 on the maturity of savings certificates from NS&I (National Savings and Investments). Self-assessment tax return: Sarah always files her self-assessment tax return online on 26 December, so her tax return for the tax year 2017-18 will be filed on 26 December 2018. Because more than 80% of Sarah's tax liability is paid under PAYE, she is not required to make self-assessment payments on account. Required: (a) Calculate Sarah's taxable income for the tax year 2017-18 Note: You should indicate by the use of zero (0) any items which are not taxable or deductible. (b) (i) Advise Sarah of the deadline for making an amendment to her self-assessment tax retum for the tax year 2017-18, and state how HM Revenue and Customs (HMRC) will calculate interest if such an amendment results in additional tax becoming payable. (ii) State the latest date by which HMRC will have to notify Sarah if they intend to carry out a compliance check in respect of her self-assessment tax return for the tax year 2017-18, and (assuming the check is not made on a completely random basis) the possible reasons why such a check would be made