Steve is a UK resident taxpayer. He works part time as an IT consultant for a small number of clients, on a project management basis. A separate contract is drawn up for each project, specifying the deadline, expected output and the fee to be paid. Steve uses his own laptop when necessary, and works from home most of the time.

Steves wife, Susan, is a pharmacist working in an NHS Trust hospital. Susan was born in 1978 and joined the hospital on 6 June 2020. Her gross pay for 2020 -21 was 60,000 and income tax of 16,850 was deducted via PAYE.

Susan is provided with motor cars for both business and private motoring. Details of the cars provided during 2020-21 were as follows:

Dates Make

6 June 2020 to 5 October 2020 Ford 6 October 2020 to 5 April 2021 BMW

List Price Emissions Gm/km

16,000 97 32,800 92

Fuel

Petrol Diesel

Her employer paid for all of the running costs of both these cars but Susan contributed 200 per month for private use of the BMW car. She also reimbursed her employer for all of the private fuel used by the Ford motor car (but not the BMW motor car).

NHS trust has paid Susans Professional membership fee of 300 during the tax year. Susan is required to have this membership to work as Pharmacist.

On 6 July 2020 , the NHS Trust lent Susan 30,000 at an interest rate of 0.25 % p.a. Susan repaid 18,000 of the loan on 6 March 2021.

During 2020/21 Susan received UK dividends of 4,500, interest on his ISA of 500 and interest on his building society account of 5,000

Susan Also had Gift Aid Donation of 4,000 (Net) during the tax year.

Required:

(a) Discuss and apply the criteria which may be used to determine whether Steve should be regarded as employed or self-employed.

(b) Prepare an income tax computation for Susan for tax year 2020 -21. If any of her income is not taxable, explain why this is the case. (Assume that the official rate of interest is 2.25%).

(c) Discuss the main features of furnished holiday lettings.