As she takes on her new position as a Lead Investigator from 6 April 2022, Kalinda will
Question:
As she takes on her new position as a Lead Investigator from 6 April 2022, Kalinda will be receiving an enhanced salary (see note 1) and employee benefits, mostly paid by her employer (see notes 2-6). She now would like to know the extent of her tax liability in the current tax year. Kalinda has other income, as detailed below.
New benefits package:
a) Car her own choice, up to the value of 30,000 (see note 2).
b) Unlimited fuel for car (due to the nature of her role).
c) Use of a flat (job-related) (see note 3)
d) Personal computer for home and work use (see note 4)
e) Personal loans (note 6)
f) The firm also provides the following ancillary services:
Maintenance and repairs 1,835
Rubbish collection 880
Water, lighting, heating, and cleaning 2,310
Loan of furniture at a cost to the employer 14,500
Kalinda contributes 500 each month towards these services.
Other Income
1. In the tax year 2022/23, Kalinda also received interest bank savings account, equal to 3% of her gross salary.
2. Her portfolio of property investments in the same tax year performed well, and she received a dividend income equal to 12% of her gross salary (note 5).
3. Kalinda is charitable at heart and has made donations (which qualify as gift aid) to her local temple and food bank. The net value of these donations is equal to 3% of her gross salary. Kalinda is entitled to the basic personal allowance of 12,570 and contributes 8% of her monthly gross salary into Fidelity, her workplace pension.
Note 1 Using Kalinda's DOB (July, 2004), calculate Kalindas salary to the nearest .
Instructions: Use the formula: Gross salary = X + (Your Month of Birth x 10,000) + 30,000 6 First, reverse your DOB and divide by ten to obtain the value for X.
Miss Kalindas income tax paid at source (P.A.Y.E.) for tax year 22/23 is 3,340.
Note 2 Choose a new car (whatever make and model of your liking) from car dealerships online for Kalindas new company car. Provide full details of the make, model, list price, type of engine, and CO2 emissions (print off the details of the car selected from the website you used and add it as an appendix to your report).
Note 3. Kalinda moved into the company flat in the Cinnabar Wharf complex on 11 May 2021. The property, which has an annual value of 10,600, is rented by her employer since April 2014 and the rental cost on the date Kalinda moved in was 2,500 per month. The terms of the rental agreement between the firm and Foxtons, a local real estate company, provide that the rent charge on the flat tracks the UK inflation rate yearly. Inflation rate in 2022 stood at 7.92%. Kalinda pays 18,000 per annum to her employer in relation to this benefit.
Note 4 On 6th June 2021, the company provided Kalinda with a new laptop computer worth 7,500. This laptop remained in her possession for 2 years, after which company policy allowed her to purchase it (wiped of all data) for 1,000. Its market value on the sale date, 6th June 2023, was 2,300.
Note 5 Kalinda receives rental income each tax year from shrewd property investments made before Hackney and Stratford areas re-developments.
Note 6 Kalinda has three different loans from her employer: A 6,500 loan to buy the necessary paintings and other ornaments for her work office. An interest-free loan of 25,000. A 136,000 loan at interest of 1.5% to enable her to buy her own home. The full amount of each loan was outstanding at 6th April 2023 and no repayments were made during 2022-23. The official rate of interest is 3%.
REQUIRED 7
Prepare a detailed calculation of Kalinda Sharmas income tax payable and her national insurance contributions for the tax year 2022/2023 (FA 2022). (20 marks) Note: Show all relevant calculations in detail on the attached Excel spreadsheet. Despite working as an investigator for a law firm, Kalinda finds tax matters overly complicated. As such, your calculations should be set out in a way that she can easily understand.
Please could you work out the calculations so i can put them into the excel spreadsheet, thanks
Expert Answer:
