Study the scenario and complete the questions that follow:

You are a junior tax clerk at a firm of tax practitioners and your manager has asked you to attend to the following email:

From: Kayla Cook

To: FirstInTax

Subject: Tax assistance required

Good day and thank you so much for your offer to help us sort out our tax affairs. My husband and I are not financial people and we don't really know much about tax, so we are very grateful for your assistance. Len and I are married out of community of property and we have three children aged $4,7$ and $11.$

My husband, Len, is a marketing executive at a large cellphone company. Len earns a fixed monthly salary and he is a member of his employer$$s pension fund and medical aid fund. Len$$s employment contract states that he must pay $7,5\%$ of his monthly salary to the pension fund and his employer will pay $10\%$ of his monthly salary to the fund. Len$$s employer pays the medical aid contributions every month. Len usually pays our medical expenses although sometimes I pay if I take one of our children to the doctor and I don$$t have his credit card.

Len has the full use of a motor car owned by his employer. It is a Hyundai Tucson that cost R$899000($including VAT and a $3-$year full maintenance plan$)$ when his employer purchased it in November $2021.$ Len does not have to pay anything for the use of the car. Len also receives an entertainment allowance of R$1000$ per month, which he uses to entertain clients, although he is not required to keep any of his slips or proof of expenses.

In July $2023,$ Len installed a solar system on our house. The total cost of the solar installation was R$220000($including VAT$),$ which included the cost of eight $275$W solar panels that cost R$5000($including VAT$)$ each.

Len is very good at managing our finances and he has some savings from which he earns interest, as well as a small share portfolio from which he earns dividends. He didn$$t sell any shares during this year.

I am a professional chef and I have my own catering business, although I am not registered as a VAT vendor. I provide hearty food and platters for special events, such as for people who entertain at home and for office functions. I employ a part$-$time child minder to look after the children when I am busy running my business.

I work from home and I have a room in our house that I use specifically for my trade. I also sometimes use my home kitchen when I need to cook hot food but usually, I use my special preparation room that I've set up with two large preparation tables, a dedicated fridge and catering equipment such as knives, plates, and so on$.$ No$-$one else is allowed to use my preparation room. The total floor area of our house is $250$ square metres. The area of my preparation room is $12,5$ square metres and the area of our kitchen is $16$ square metres.

In the table below, I have provided details of Len's salary, income and expenses. I've also provided a separate list of my income, expenses relating to my catering business, and some of my other expenses, which I hope I can claim as tax deductions as well. If any of my expenses won$$t be allowed as deductions, please can you briefly explain the reasons to me$?$

Please would you tell me how much tax my husband and I owe for this year? I think Len won$$t have to pay in any tax as his employer withholds employees$$ tax every month, but I hope you can confirm that for us$.$

R

Len$$s income and expenses for the year ended $29$ February $2024$:

Salary $($R$80000\backslash$times $12)$

$960000$

Year$-$end bonus paid in December $2023$

$85000$

Use of company vehicle

$0$

Entertainment allowance $($R$1000\backslash$times $12)$

$12000$

Pension fund contributions paid by Len $($R$6000\backslash$times $12)$

$72000$

Pension fund contributions paid by employer $($R$8000\backslash$times $12)$

$96000$

Medical aid contributions paid by employer $(12000\backslash$times $12)$

$144000$

Medical expenses paid by Len and not reimbursed by the medical aid fund

$3800$

Interest from SA bank savings account

$23145$

Interest from tax$-$free savings account

$3940$

Dividends from SA companies

$13200$

Dividends from foreign companies listed on the JSE

$4150$

Donation to the NSPCA $($s$18$A certificate obtained$)$

$2500$

Employees$$ tax $($PAYE$)$ withheld by Len$$s employer

$468513$

Kayla$$s income and expenses for the year ended $29$ February $2024$:

Catering income

$165000$

Cost of food and consumables used directly in generating the catering income

$67000$

Costs of travelling to clients to deliver food $($I have all the documentation and a log$-$book$)$

$3400$

Cost of my preparation table and catering equipment $$ purchased in $2022($Note $1)$

$40000$

Wages and expenses paid to the child$-$minder

$30000$

Medical expenses paid by Kayla and not reimbursed by the medical aid fund

$1900$

Interest on the bond on our house

$82000$

Municipal costs paid on our house $($rates$,$ taxes, services, water and electricity$)$

$51000$

Thank you so much for your assistance!

Regards,

Kayla

Source: Arendse, J$.2024.$

b$)$ Calculate Kayla normal tax liability for the year ended $29$ February $2024$