Rita, who is a fashion designer for Daring Designs Limited, was relocated from London to Manchester on 6th April 2017. Her annual salary is £48,000. She was immediately provided with a house with an annual value of £5,000 for which her employer paid an annual rent of £6,500. Rita was reimbursed relevant relocation expenditure of £12,000. Daring Designs Limited provided ancillary services for the house in 2017/18 as follows:

Electricity......................... £300

Gas................................... £350

Water............................... £500

Council tax................... £1,300

Property Repairs.......... £3500

The house had been furnished by Daring Designs Limited prior to Rita's occupation at a cost of £30,000. Om 6th October Rita bought all of the furniture from Daring Designs for £20,000 when its market value was £25,000.

Daring Designs Limited had made a loan to Rita in 2000 of £10,000 at a rate of interest of 5%. The loan is not being used for a 'qualifying purpose. No part of the loan been repaid.

Rita was provided with a 1800 cc company car. It had a list price of £18,500 when new in August 1998. Daring Designs Limited paid for the petrol and all the mileage done by Rita until 5th December 2004. On 5th December 2004 the company discontinued the company car scheme and sold the car to Rita for £5,000, its market value at the date. Her mileage from 6th April to 5th December 2004 was 20,000 of which 13,000 was on business, CO₂ emission 240g/km.

You are required to calculate the total amount chargeable to income tax under Schedule E on Rita for the year 2004/05. ORI 5%.

Answer rating: 100% (QA)

1 RITA Employment income 201920 Salary 50910 Benefits Annual value of property Note ... View the full answer