Jade and John have been married for 3 years. Jade is employed by Lawley Ltd, she earned
Question:
Jade and John have been married for 3 years. Jade is employed by Lawley Ltd, she earned an annual salary of £48,000 in 2019/20. She also received a payment of £4,000 from her employer to cover expenses in connection with her employment, of which she spent £1,500 on business travel and £1,200 taking clients out for business lunches.
Lawley Ltd provided Jade with a loan of £45,000 in December 2018, she pays the company 1% interest on this loan. Jade repaid £10,000 of the loan on 31st December 2019.
John has been offered two new jobs with different companies. In both positions, John will start work on 6 April 2020. The remuneration packages are as follows:
Job 1
- Basic salary £100,000.
- An unfurnished home, which the employer bought many years ago for £60,000. It was extensively improved in 2010 at a total cost of £150,000. The market value in April 2020 is estimated at £450,000. The annual value of the property is £12,000.
- Membership of the company's occupational pension scheme. John will be required to make a contribution of 5% of his basic salary per annum. His employer will match this contribution.
- Private medical insurance at a cost to his employer of £1,500 per annum.
Job 2
- Basic salary £80,000 and an annual bonus of £25,000 per annum.
- During the week John will stay at a hotel to avoid commuting, his employer will pay £24,000 a year of hotel costs in respect of John.
- John will purchase his own private medical insurance at an annual cost of £2,500.
John owns a number of investment properties which generate annual assessable rental income in excess of £175,000.
- Calculate the national insurance payable by Jade and Lawley Ltd in respect of Jade’s employment for 2019/20.
- Calculate John’s income tax and national insurance contributions under each job.
- Calculate John’s net disposable income under each job, defined as earnings minus taxation and other payments made by John.