7. Paint taken by Samuel In January 2021 Samuel took paint costing 150 to use decorating...

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7. Paint taken by Samuel In January 2021 Samuel took paint costing £150 to use decorating his own home. The paint had a resale value of £200 and nothing was recorded in the accounts. 8. Fixed assets During December 2020, two computers worth £800 each, and office furniture and equipment worth £2,000, were purchased so that the partnership was ready to commence trading on I January 2021. In May 2021 it purchased a new electric car, with emissions of Og/km, for Amy for £13,000. Amy estimates her private usage of the car at 25%. The partnership then purchased a second-hand car for £4,200 in August 2021 to be used for deliveries only. This car had CO₂ emissions of 52g/km. Further office furniture was purchased in October 2021 for £1,550. Samuel and Amy have agreed to allocate themselves salaries of £14,400 pa each and interest at 5% pa on capital introduced. Any remaining partnership profits are to be split in the ratio 1:2. Samuel and Amy anticipate that their tax adjusted trading profits will be 35% higher for the year ended 31 October 2022 than they were in the period ended 31 October 2021. Requirements: 1. Calculate the partnership tax adjusted trading profits (after capital allowances) for the 10 months ended 31 October 2021. (19 marks) Note: Ignore VAT 2. Calculate the assessable trading profits for both Samuel and Amy for the tax years 2020-21 and 2021-22. State the dates of the basis periods relating to 2020-21 and 2021-22 and the amounts of any resulting overlap profits relating to 2020-21 and 2021-22 (21 marks) Amy's other income Although it is now 2022, Samuel and Amy have not yet made any payments of income tax or national insurance relating to their self-employment. Neither Samuel nor Amy has yet filed a self-assessment return. Until 31 December 2020, Amy worked as an employee of Disegno UK Ltd. She had an annual salary of £13,809 and a diesel company car registered in 2017 with a list price of £14,000 and CO₂ emissions of 83g/km. Disegno UK Ltd paid for all expenses relating to the car including petrol. Disegno UK Ltd also contributed an amount equal to 5% of Amy's salary to a registered occupational pension scheme. Amy paid £1,642 in PAYE for the year 2020-21. On 1 January 2021, Amy rented out her home unfurnished for £600 per month, received on the 10th of each month. In the period to 5 April 2021, she paid agents' fees for managing the rental of £211 and a one-off finders' fee of £518. In December 2020 Amy received dividends of £3,892 from N&T plc, interest of £100 from a NS& Direct Saver account and £225 interest on her building society current account. She received £900 from a one off piece of work in March 2021. Requirement: Calculate the income tax payable by Amy for 2020-21. Note: Use 2021-22 rates and allowances to answer this part. (15 marks) Total marks for question: 55 marks 7. Paint taken by Samuel In January 2021 Samuel took paint costing £150 to use decorating his own home. The paint had a resale value of £200 and nothing was recorded in the accounts. 8. Fixed assets During December 2020, two computers worth £800 each, and office furniture and equipment worth £2,000, were purchased so that the partnership was ready to commence trading on I January 2021. In May 2021 it purchased a new electric car, with emissions of Og/km, for Amy for £13,000. Amy estimates her private usage of the car at 25%. The partnership then purchased a second-hand car for £4,200 in August 2021 to be used for deliveries only. This car had CO₂ emissions of 52g/km. Further office furniture was purchased in October 2021 for £1,550. Samuel and Amy have agreed to allocate themselves salaries of £14,400 pa each and interest at 5% pa on capital introduced. Any remaining partnership profits are to be split in the ratio 1:2. Samuel and Amy anticipate that their tax adjusted trading profits will be 35% higher for the year ended 31 October 2022 than they were in the period ended 31 October 2021. Requirements: 1. Calculate the partnership tax adjusted trading profits (after capital allowances) for the 10 months ended 31 October 2021. (19 marks) Note: Ignore VAT 2. Calculate the assessable trading profits for both Samuel and Amy for the tax years 2020-21 and 2021-22. State the dates of the basis periods relating to 2020-21 and 2021-22 and the amounts of any resulting overlap profits relating to 2020-21 and 2021-22 (21 marks) Amy's other income Although it is now 2022, Samuel and Amy have not yet made any payments of income tax or national insurance relating to their self-employment. Neither Samuel nor Amy has yet filed a self-assessment return. Until 31 December 2020, Amy worked as an employee of Disegno UK Ltd. She had an annual salary of £13,809 and a diesel company car registered in 2017 with a list price of £14,000 and CO₂ emissions of 83g/km. Disegno UK Ltd paid for all expenses relating to the car including petrol. Disegno UK Ltd also contributed an amount equal to 5% of Amy's salary to a registered occupational pension scheme. Amy paid £1,642 in PAYE for the year 2020-21. On 1 January 2021, Amy rented out her home unfurnished for £600 per month, received on the 10th of each month. In the period to 5 April 2021, she paid agents' fees for managing the rental of £211 and a one-off finders' fee of £518. In December 2020 Amy received dividends of £3,892 from N&T plc, interest of £100 from a NS& Direct Saver account and £225 interest on her building society current account. She received £900 from a one off piece of work in March 2021. Requirement: Calculate the income tax payable by Amy for 2020-21. Note: Use 2021-22 rates and allowances to answer this part. (15 marks) Total marks for question: 55 marks

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