Samuel, a shareholder and the managing director of Neptune Ltd, intends to change the way he draws profits from the company. Samuel's only income is from the company.

Current arrangements

Samuel receives a salary of 46,000 pa from the company and the use of a fully expensed company car (including the provision of diesel), with a list price of 16,080 and CO₂ emissions of 104g/km. In addition, Samuel is provided with a mobile telephone which is paid for by Neptune Ltd. The cost of private calls amounted to 210 in 2019/20. Samuel's laptop computer is owned by Neptune Ltd and cost 3,200 on 3 April 2015 when it was purchased and first provided to Samuel. Samuel uses the laptop almost exclusively for the purpose of his employment. His private use of the laptop is insignificant.

Neptune Ltd did not declare any dividends for the year ended 31 March 2020.

Future arrangements

To replace the current arrangements, Samuel will receive a salary of 5,200 pa and the company will pay dividends to Samuel of 45,000 per year. Samuel will not have a company car or mobile telephone but will instead receive a mileage allowance of 47p per mile for an estimated 11,000 business miles travelled in his own car.

Samuel estimates that he will spend 8,200 pa on the costs of providing his own car and his own mobile telephone. Samuel will not need to buy his own laptop.

Requirement

Calculate Samuel's income tax and national insurance liabilities and his net spendable income under both the current and future arrangements. You should make all calculations based on tax rates and allowances for 2019/20. (19 marks)