Fundamentals Level – Skills Module

Paper F6 (UK)
Taxation
(United Kingdom)

Time allowed: 3 hours 15 minutes

This question paper is divided into three sections:

Section A – ALL 15 questions are compulsory and MUST be

attempted

Section B – ALL questions are compulsory and MUST be

attempted

Section C – ALL THREE questions are compulsory and MUST be

attempted

Do NOT open this question paper until instructed by the supervisor.

Do NOT record any of your answers on the question paper. This

question paper must not be removed from the examination hall.
TAX RATES AND ALLOWANCES
Throughout this exam kit:
1 Calculations and workings need only to be made to the nearest £.
2 All apportionments should be made to the nearest month.
3 All workings should be shown in Section C.

The tax rates and allowances below will be reproduced in the examination paper for Paper F6 in the year
1 April 2017 to 31 March 2018. In addition, other specific information necessary for candidates to
answer individual questions will be given as part of the question.

INCOME TAX
Normal Dividend
rates rates
Basic rate £1-£32,000 20% 7.5%
Higher rate £32,001 - £150,000 40% 32.5%
Additional rate £150,001 and above 45% 38.1%
Savings income nil rate band - Basic rate taxpayers £1,000
- Higher rate taxpayers £500
Dividend nil rate band £5,000

A starting rate of 0% applies to savings income where it falls within the first £5,000 of taxable income.

Personal allowance
Personal allowance £11,000
Transferable amount £1,100
Income limit £100,000
Residence status

Days in UK Previously resident Not previously resident

Less than 16 Automatically not resident Automatically not resident
16 to 45 Resident if 4 UK ties (or more) Automatically not resident
46 to 90 Resident if 3 UK ties (or more) Resident if 4 UK ties
91 to 120 Resident if 2 UK ties (or more) Resident if 3 UK ties (or more)
121 to 182 Resident if 1 UK tie (or more) Resident if 2 UK ties (or more)
183 or more Automatically resident Automatically resident
 Child benefit income tax charge
Where income is between £50,000 and £60,000, the charge is 1% of the amount of child benefit
received for every £100 of income over £50,000.

Car benefit percentage

The relevant base level of C02 emissions is 95 grams per kilometre.

The percentage rates applying to petrol cars with C02 emissions' up to this level are:
50 grams per kilometre or less 7%
51 grams to 75 grams per kilometre 11%
76 grams to 94 grams per kilometre 15%
95 grams per kilometre 16%

Car fuel benefit

The base figure for calculating the car fuel benefit is £22,200.

Individual Savings Accounts (ISAs)

The overall investment limit is £15,240.

Pension scheme limits

Annual allowance - 2014/15 to 2016/17 £40,000
- 2013/14 £50,000
Minimum allowance £10,000
Income limit £150,000
The maximum contribution that can qualify for tax relief without any earnings is £3,600.

Authorised mileage allowances: cars

Up to 10,000 miles 45p
Over 10,000 miles 25p

Capital allowances: rates of allowance

Plant and machinery
Main pool 18%
Special rate pool 8%

Motor cars
New cars with C0 2 emissions up to 75 grams per kilometre 100%
C02 emissions between 76 and 130 grams per kilometre 18%
C02 emissions above 130 grams per kilometre 8%

Annual investment allowance

Rate of allowance 100%
Expenditure limit £200,000
 Cap on income tax reliefs
Unless otherwise restricted, reliefs are capped at the higher of £50,000 or 25% of income.

CORPORATION TAX
Rate of tax 20%
Profit threshold £1,500,000

VALUE ADDED TAX

Standard rate 20%
Registration limit £83,000
Deregistration limit £81,000

INHERITANCE TAX: Tax rates

£1-£325,000 Nil
Excess - Death rate 40%
- Lifetime rate 20%

Inheritance tax: Taper relief

Percentage
Years before death: reduction
Over 3 but less than 4 years 20%
Over 4 but less than 5 years 40%
Over 5 but less than 6 years 60%
Over 6 but less than 7 years 80%

CAPITAL GAINS TAX

Normal Residential
rates property
Rates of tax Lower rate 10% 18%
-Higher rate 20% 28%
Annual exempt amount £11,100
Entrepreneurs' relief - Lifetime limit £10,000,000
-Rate of tdx 10%
 NATIONAL INSURANCE CONTRIBUTIONS
Class 1 Employee £1-£8,060 per year Nil
£8,061 - £43,000 per year 12%
£43,001 and above per year 2%

Class 1 Employer £1 - £8,112 per year Nil

£8,113 and above per year 13.8%
Employment allowance £3,000

Class 1A 13.8%

Class 2 £2.80 per week

Small profits threshold £5,965

Class 4 £1-£8,060 per year Nil

£8,061 - £43,000 per year 9%
£43,001 and above per year 2%

RATES OF INTEREST (assumed)

Official rate of interest 3%
Rate of interest on underpaid tax 3%
Rate of interest on overpaid tax 0.50%
SECTION - A - ALL 15 Questions are Compulsory and MUST be Attempted
Each question is worth 2 marks.
1.
i. Xian was born in Poland. He lives in his home town in Poland initial the tax year 16/17 when he
came to UK to visit on 12 July 2015 until 16 Feb. 2016

ii. Roma was born in Switzerland. She had lived there until 16/17 when she decided to visit her aunt
in UK for a month.

Who is treated as UK resident person

a) Xian only
b) Roma only
c) Both
d) None of the above

2. Mr. Kolson had rent out a furnished house for the last server years following information is available.
£
Rent per month 600
Replacement of kitchen units 1700
Repairs to damaged roof 400

Kitchen units were replaced in an attempt to give a modernized look. The improvement element cost
Mr. Kolson £ 500 which is included in £1700. Old units were scrapped for £275.

What are the net expenses which Mr. Kolson can claim for deduction against rent?
a) £ 2100
b) £ 1325
c) £ 1600
d) £ 1700

3. Which one would not quality for capital allowances

(i) Moveable alteration to install P&M
(ii) Building alteration to install P&M
(iii) Fake ceiling
(iv) Refrigerator used in a restaurant

a) (ii), (iii)
b) (ii), (iii), (iv)
c) (i), (ii)
d) (i), (ii), (iii)
4. Jasmine’s employment Income is £ 95,000. She contributed £ 30,400 in her personal pension
scheme. She has not been a member of personal pension scheme before.

Advise how much extra she can pay into personal pension scheme without incurring annual
allowance charge.
a) £2000
b) £40000
c) £50000
d) £1600

5. Particia bought 20,000 shares in sharing Plc in May 2005 for £ 40,000. On 7 Sept 2016, the entire
share capital of sharing Plc has acquired by Sandoz plc. String plc shareholders received 2 Sandoz
plc’s shares and £ 0.50 each for each share held string plc’s shares were quoted at £ 1.75

What is chargeable gain arising on this takeover on 7 Sept 16

a) £60000
b) £5000
c) £1000
d) £50000

6. Sawantha purchased an asset for business purposes in January 2005 for £ 160,000. In August 2016
he sold that asset for £ 180,000 and spent £ 210,000 on a new business asset in November 2016.

What is the here cost of new asset and by when claim should be made for rollover relief for asset
purchased in August 2016.
a) 190,000 & 5 April 2021
b) 210,000 & 5 April 2020
c) 190,000 & Aug 2019
d) 210,000 & Aug 2020

7. Shan has owned his house since 1st Feb 2005. He move in as he bought it and stayed there till 1st
Feb 2015 when he had to move out for a world tour. Whilst travelling he decided to settle
somewhere and then he did not return. He sold the house in Feb. 2017

What is Shan’s actual & deemed period of occupation if PPR is considered.

a) 11.5 year
b) 5 year
c) 3 year
d) 2.5 year
8. Nicole died on 10th May 16 leaving an estate of £ 1500,000. Her husband died in Aug 08 and he had
left an estate of £ 200,000 at that time form which £ 50,000 had to be given to Nicole.

What NRB will be available to Nicole if all beneficial claims are made upon her death

NRB was £ 312,000 in 08/09

a) 325,000
b) 117000
c) 442,000
d) 493,675

9. Following transfers are made by Jonathan in the tax year 16/17.

(i) A transfer of £ 151000 cash to his wife on 7-6-16.
(ii) A cash of £33000 to his Son at the point of his marriage on 10-10-16.
(iii) A fee of £ 2000 was paid to his daughter’s school who is a student of 8th grade on 1 Jan 17.
(iv) £ 15000 cash to trust on 15 Feb 17.

Required
How much NRB will be used against their transactions
a) £ 325,000
b) £ 310,000
c) £ 15,000
d) £ 48,000

10. Harvey Ltd prepared their accounts for 15 months ended 31 May 17. What is their chargeable period
& when would Harvey Ltd file their return

Chargeable A/C period due date for filing of Return

(a) 15 months ended 31.3.17 31.3.18

(b) 15months ended 31.3.17 due on 31 Dec 17 for 1st chargeable A/C period
And 31.3.18 for 2nd A/C period ended 31.3.18

(c) 2 chargeable A/C period 1st accounting Due on 31 Dec 17 for 1st accounting period
Period ending on 31 Dec 16 & 2nd A/C & 31-3-18 for 2nd A/C period
Ending on 31-3-17

(d) 2 chargeable A/C period 1st accounting

period ending on 31 Dec 16 & 2nd A/C
Ending on 31-3-17 due on 31.3.18
11. Fix Ltd had made following results for the year ended 31-6-16
Trading income 67000
Rent 13000
Dividend 4000

Fix Ltd has paid gift and donation of £ 360.

What is corporation tax liability for the year ended 30-6-16

a) £15928
b) £79640
c) £80000
d) £69600

12. Dutch Ltd has a trading loss of £55,000 in the y/e 31-3-17. The loss is carried back against y/e 31-3-
16 against total profits before QCD.

By what date must a claim in respect these losses be made?

a) 31 March 2021
b) 31 March 2022
c) 31 March 2019
d) 31 March 2020

13. East Ltd has delivered the good on 25 Jun 16. Cash of £ 500 was received in advance on 13th June
16. The balance of £ 1500 was received along with invoice at 2nd July 16.

When does the tax liability of balance of £ 1500 should be recorded.

a) 25th 6-16
b) 13th 6-16
c) 2nd July 16
d) 31st July 16

14. Rose Ltd has made standard rated sales of £ 27000 (net) & zero rated sales of £ 3000 standard rated
purchases of £ 2600 (net) was also made during this quarter.

How much tax will be saved if flat rate scheme is opted at the rate of 8%.
a) £408
b) £2832
c) £2048
d) £4880
15. Door plc commenced trading on 1 Dec 2015. Its sales have been as follows:
2015 Dec 4200 2016 July 5800
2016 Jan 4800 2016 Aug 5700
2016 Feb 5300 2016 Sep 6000
2016 Mar 5200 2016 Oct 7600
2016 April 4400 2016 Nov 9500
2016 May 4600 2016 Dec 10,800
2016 June 4500 2017 Jan 14000

The company’s sales are all standard rated and all of the above figures are stated exclusive of VAT
from what date would Door plc become able to register for VAT from HMRC

a) 30th January 2017

b) 28th February 2017
c) 1st March 2017
d) 1st January 2017
SECTION B - ALL Questions are Compulsory and MUST be Attempted
Each question is worth 2 marks
The following scenario relates to question number 16 to 20

On 30 June 2016 three acres of land were sold for £340,000 by jump-on Ltd. It had
originally purchased four acres of land on 6th may 2004, and the indexed cost of the
four acres on 30 June 2016 was
£354,000. The market value of the unsold acre of land as at 30 June 2016 was £80,000. During June
2013 jump-on Ltd spent £30,000 clearing and levelling all four acres of land. The land has never been
used for business purposes.

On 1 October 2016 an investment property owned by jump-on Ltd was destroyed in a fire. The indexed
cost of the property on that date was £170,000. Jump-on Ltd received insurance proceeds of £205,000
on 20 October 2016, and on 31 October 2016 the company paid £195,000 for a replacement investment
property.

Paul
Paul is considering to gift a business that he has run as a sole trader since 1 July 2004 to his daughter.
The business will be sold for £125,000, and this figure, along with the respective cost of each asset, is
made up as follows:
Sale Proceeds Cost
£ £
Freehold Shop 85,000 63,000
Freehold Warehouse 22,000 19,700
Net Current Assets 18,000 16,000
Total 125,000 98,700

The assets have all been owned for more than one year. The freehold warehouse has never been used
by Paul for business purposes. Paul has received consideration of £80,000 from his daughter

REQUIRED:

16. What is the Capital Gain of jump-on Ltd on the part disposal of the land?
a) £ 29143
b) £ 14000
c) £ (44000)
d) £ 266857

17. Calculate the base cost of the investment property of jump-on Ltd that was purchased on
31st October 2016.
a) 35000
b) 170000
c) 10000
d) 60000
18. by when new asset should be purchased if rollover relief has to be claimed against
insurance proceeds received on destruction of asset
a) 3 years after the date of destruction
b) 1 year after the date of destruction
c) 1 year after the receipt of insurance proceeds
d) 3 years after the receipt of insurance proceeds

19. Which of the following TWO statements are conditions of Entrepreneur Relief?
1. Asset disposed must be from the on-going business of an individual.
2. Shares disposed must be from the personal co. of the individual. A personal co. is one where the
individual’s shareholding is at least 15%.
3. Asset must be disposed within 3 years of the cessation of the partnership’s business.
4. Shares disposed must be from the personal co. of the individual. A personal co. is one where the
individual was a part-time employee.

a) (i) & (ii)

b) (i) & (iii)
c) (ii) &(iii)
d) (iii) & (iv)

20. Calculate Paul’s Chargeable Gains assuming he claims gift relief instead of Entrepreneur
Relief on the disposal of his business.
a) £ 16816
b) £ 16602
c) £ 0
d) £ 24300
The following scenario relates to question number 21 to 25
Rita, aged 38, owns the following assets:
(1) Two properties respectively valued at £420,000 and £328,000. The first property has an outstanding
repayment mortgage of £130,000, and the second property has an outstanding endowment
mortgage of £52,000.
(2) Vintage motor cars valued at £130,000.
(3) Investments in individual savings accounts valued at £38,000, National Savings & Investments
savings certificates valued at £40,000, and government stocks (gilts) valued at £38,000.

Rita owes £24,000 in respect of a personal loan from a bank, and she has also verbally promised to pay
legal fees of £7800 incurred by her niece.

Under the terms of her will Rita has left all of her estate to her children. Rita’s husband died on 12 March
2002, and £96,800 of his inheritance tax nil rate band was used. The nil rate band for the tax year 2001–
02 is £242,000.

Carol
On 14 September 2016, Carol made a gift of 1,500 £1 ordinary shares in roots Ltd, an unquoted
investment company, to her daughter. Before the transfer Carol owned 8,000 shares out of Roots Ltd’s
issued share capital of 10,000 £1 ordinary shares. On 14 September 2016, Roots Ltd’s shares were worth
£3 each for a holding of 15%, £7 each for a holding of 65%, and £8 each for a holding of 80%.

Roma ltd
Roma ltd has made following accounts for 18 months ended 31st march 2017.Following information is
available:
Profit 180000
Property income 18000

Rent of 15000 has been received till 30th September 2016 and rent of 3000 is due on 31st march 2017

Somoplc

Somoplc has one 51% related company Tor ltd. following information is available:
Somoplc Tor ltd
th
y/e 30 September 2016 9 months ended 30th September 2016
Tax adjusted trading result 90000 (86000)
Required:
21. Calculate the value of Rita’s Estate if she were to die today.
a) 840000
b) 864000
c) 832200
d) 78800

£
First Property 290,000
Second Property 328,000
Motor Car 130,000
Individual Savings Account 38,000
National Savings and Investment Certificates 40,000
GILTS 38,000
Personal Loan (24,000)
Legal Fees 0
Gross Chargeable Estate 840,000

22. If Rita were to die today, what amount of Nil Rate Band will be available for the
Inheritance Tax Calculation?
a) £455,000
b) £470,200
c) £520,000
d) £553,200

23. What is the transfer of value arising on the transfer of shares in Roots ltd by Carol to her
daughter.
a) 18500
b) 45500
c) 45000
d) 4500

24. What is the corporation tax of Roma ltd for an accounting period ended 31st march 2017
a) 39600
b) 15600
c) 12000
d) 63000

25. How much trading loss should be surrendered by Tor ltd against the results of Somo plc
for the year ended 30th September 2016
a) (86000)
b) 22500
c) 64500
d) 67500
The following scenario relates to question number 26 to 30
The following information is available in respect of smartLtd’s value added tax (VAT) for the quarter
ended 31 March 2017:

(1) Output VAT of £62000 was charged in respect of sales to ZABBIST plc. This figure includes output
VAT of £2800 on a deposit received on 28 December 2016. The deposit was in respect of a contract
which was completed on 31 st January 2017, with a sales invoice being issued on 19February 2017.

(2) In addition to the above, SmartLtd also charged output VAT of £6500on sales to its 51% related
companies. These 51% related companies and SmartLtd are not currently registered as a group for
VAT purposes.

(3) The Sales director of Smart Ltd is provided with a company motor car which is used for both business
and private mileage in the quarter ended 31st March 2017. The director reimburses Smart Ltd for the
40% private use element.Fuel was purchased on 31st December 2016 for 900.The relevant quarterly
scale charge is £450. This figure is inclusive of VAT.

(4) On 31 March 2017, Smart Ltd wrote off an impairment loss in respect of a sales invoice that was
issued on 15 September 2016. This invoice was due for payment on 31 November 2016. Output VAT
of £460 was originally paid in respect of the sale.

(5) Input VAT of £12,000 was incurred in respect of expenses.

This figure includes the following input VAT:
Entertaining UK customers - £290
Entertaining overseas customers - £560
Entreating overseas suppliers-650
Repainting the exterior of the company’s office building - £980
Extending the office building in order to create a new reception area - £910

GARRY ltd
Garry ltd is a new company involved in selling electronic equipments. They got registered with HMRC on
1st October 2016. For the quarters ended 31 December 2016 and 31 March 2017, GarryLtd was two
months late in submitting its VAT returns and in paying the related VAT liabilities, which were £28,800
and £46,400 respectively.
Required:
26. On what date will the VAT on the sale to ZABBIST plc be recorded?
a) £59,200 on 31 January, 2017
b) £59,200 on 28 December, 2016
c) £59,200 on 31 January, 2017
d) £59,200 on 19 February, 2017

27. Which of the TWO following statements are advantages of registering for Group VAT?
i) A single VAT return has to be prepared resulting in saving of administrative costs.
ii) All companies remain jointly liable for the VAT
iii) All the accounting responsibility lies with a single appointed representative member
iv) No input VAT is charged on intra-group transfers

a) (i) only
b) (i) & (iii)
c) (ii) & (iii)
d) (i) & (iv)

28. What is the correct treatment of the VAT associated with the following items for the
quarter ended 31st march 2017?
Fuel for Private use (i) Input VAT is calculated on the Scale Charge
(ii) Input VAT is calculated on the actual fuel cost
(iii) Output VAT is calculated on the Scale Charge
Irrecoverable Debts (iv) No VAT impact. The amount will be treated as a business loss
(v) Input VAT will not be recovered yet, as 6 months from due date of
payment have not passed
(vi) Input VAT will be recovered as 6 months from date of transaction
have passed

a) (i) & (v)

b) (iii) & (v)
c) (ii) (vi)
d) (ii) & (iv)

29. How much input Vat is recoverable in respect of expenses?

a) 2450
b) 3100
c) 3390
d) 1890
30. What Surcharge penalty will be imposed on Garry Ltd for delaying the submission of the
VAT returns and the Liability payments for the following quarters?

Quarter ended 31 December 2016: Quarter ended 31 March 2017:

£ £
a) 0 928
b) 0 528
c) 0 400
d) 576 2320
SECTION C - ALL THREE Questions are Compulsory and MUST be Attempted

Question 31
Mr. Johnson had started doing his business back in 2003, which was involved in manufacturing
electronics items. Due to market recession he decided to cease business on 31 December 2016.
Afterwards he started employment with Nova ltd. Following information is available for the tax year
16/17.

Self employment:
Mr. Johnson ceased his business on 31 December 2016, his results for 9 months ended 31 December are
as follows:
£
Gross Profit 68000
Depreciation (10800)
Telephone expenses (Note 1) (4000)
Property expenses (Note 2) (16800)
Other expenses (all allowable) (20400)
Net Profit 16000

1. Mr. Johnson had made use of telephone for business and private calls, 25% of telephone calls are
estimated to be used for private purposes.

2. Mr. Johnson lives in a flat which is situated above his shop. One third property expenses are related
to flat.

3. Plant and Machinery

WDV b/f General Pool 25000
WDV b/f SLA 15000

Equipment was purchased on 13 May 2016 for £215000.

SLA was sold for £17000 on 30 November 2016. It was purchased for £20000. All items of General Pool
were sold for £198000 on 31 December 2016, including equipment.

Employment Income:
Mr. Johnsons started his employment with Nova ltd on 1 January 2017.

His gross salary till 5 April 2017 was £42000. PAYE of £1900 was deducted during this tax year of
2016/17

A 2200cc diesel driven car was given to him on 7 February 2017 for which Nova ltd paid £29000 (list
price £30500) Mr. Johnson was provided with fuel for private purposes costing £1250, CO2 emission of
car is 124g/km.
A rented apartment was also given to him on 1 January 2017 for which Nova ltd pays rent of
£1500/month. Annual value of the apartment is £15000.

Mr. Johnson pays 6% of his gross salary of £42000 into his occupational pension scheme.

Other information
Mr. Johnson paid £4600 in personal pension scheme.
a) Calculate tax adjusted trading loss for 9 months ended 31 December 2016 (6 marks)
b) Calculate Income tax Payable for the tax year 2016/17. Assume that trading loss is adjusted in
current tax year.(6 marks)
c) State the ways through which losses for the tax year 2016/17 could be adjusted. (No calculation for
loss adjustment is required for this part)(3marks)
(15 marks)
Question 32
Abbot plc is a renowned company involved in manufacturing leather jackets.

The company’s summarized statement of profit and loss for the year ended 31 March 17 is as follows:
£
Operating Profit (note 1) 2,086,000
Property Business Profit (note 2) 80,000
Loan interest receivables (note 3) 15,000
Profit on Disposal of property (note 4) 70,000
Profit before Interest and tax 1,921,000
Less: interest payable (note 5) (6000)
Profit Before tax 1,915,000

Note 1
Depreciation of £87,000 has been deducted in arriving at the figure of £2,086,000.

Note 2
A building has been purchased on 1 October 2016 for £396,000 and it remained empty till31 December
2016. The building was then let out from 1 January 2017.

Following information is available:

£
29.12.16 Rent received in advance for y/e 31 .12.17 124000
3.3.17 Repairs of the damaged roof due to flood (4000)

Note 3
£
Loan interest for the year 23,000
Interest accrued at 31.3.16 (11,000)
Interest accrued at 31.3.17 3000
Loan Interest received 15,000

Note4
A warehouse was sold for £104000 on 3.1.17. This warehouse was purchased on 6 May 2004 for
34,000.RPI on 6 May 2004 was 138.8and RPI on 3 January 2017 was 205.5.Abbot plc is intending to
purchase office building on 31 May 2017

Note 5
A loan has been taken out for trading activities; £ 4500 of interest has been paid for the year ended 31
December 2016. Interest of 500 was accrued on 31 March 2017.

A Non – trading loan was also taken out on 1 October 2016 to finance the purchase of building which has
been let out (see note 2 above).Interest of 1000 was due on 31 March 2017
Note 6
£
3.1.17 Computer 296,000
11.1.17 Car (CO2 emission 145g/km) 14,000
15.1.17 Car (Co2 emission 104g/km) 21,000

TWDV of general pool and special rate pool on 1.4.16 are 45,000 and 16,000 respectively

TWDV of SLA on 1.4.16 was £10,000. This SLA was purchased on 9 August 2007

No disposal has taken place during year end 31 march 2017.

Note 7
Abbot plc has two 51% related companies

Note 8
Abbot plc was a large sized company for the year ended 31 March 2016.
Required
a) Calculate Corporation tax liability for year ended 31.May 2017 for Abbot plc.(10 marks)
b) Calculate Corporation tax saved if an office building is purchased on 31 May 2017 for £100,000 and
rollover relief is claimed against the disposal of warehouse.(3 marks)
c) State the amount and due dates for payment of corporation tax for Abbot plc for the year ended 31
December 2017. Assume that profits of Abbot plc occurred evenly throughout the year ended 31
December 2017.(2 marks)

Total marks:15
Question 33
Kia, Kim and Zim have been in partnership business for several year .Only Kim is working in his
partnership business and thus withdrawing a salary of £ 4000 per year . Due to falling health Kim has
decided to retire from partnership business on 31 December 2016.

The following details are given below:

Tax adjusted trading profit for partnership for year ended 31 march 2017 is £120,000(before adjusting
capital Allowance)

Plant and Machinery £

TWDV of Kia’s Car (CO2 emission 105g/km) 15000
TWDV of Kim’s Car (CO2 emission 110g/km) 16000
TWDV of Zim’s Car (CO2 emission 145g/km) 12000

Each employee is using their cars for 40% private use .On 31 December 2016 Kim retained his Car with
himself when its MV was £9500.

Profit Sharing ratio

Kia Kim Zim
6.4.16-31.12.16 50% 30% 20%
1.1.17-5.4.15 50% - 50%

Required
a) Calculate the trading income assessment for the tax year
2016/17.( 7 marks)
b) Calculate NIC class 2 and Class 4 for Kim only.(3 marks)

total marks:10