Ruhee works at Zipp ltd as a finance Manager. The following information is available for the tax year 2020- 21: Employment 

a. During the tax year 2020-21, Ruhee received a gross salary of £75,000 from Zipp Limited. Ruhee’s PAYE was £22,500. 

b. Ruhee received the following bonus payments: Date Paid Entitlement to bonus - Date Amount, £ 25 April 2020 20 July 2020 7,500 30 April 2021 15 April 2021 7,000 

c. Ruhee contributes £7,000 to the company’s occupational pension scheme. Zipp contributes on Ruhee’s behalf into the occupational pension scheme £10,000. 

d. Ruhee also had a diesel-powered car, which has a list price of £27,000. The car cost Zipp ltd £24,000, and has an official CO2 emission rate of 172 g/km. Ruhee made a capital contribution of £6,500 towards the cost of the car when it was first provided to her. Ruhee’s employer pays all the car’s running expenses including fuel for her private use. 

e. Zipp has provided Ruhee with living accommodation. The company purchased the property in 2018 for £235,000. Improvements costing £30,000 were made to the property during December 2020. The annual rateable value of the property is £8,500 Ruhee pays £300 per month to her employer toward this accommodation. 

f. On 6 April 2020, Zipp ltd paid a health club membership fee of £800 for the benefit of Ruhee. 

g. Ruhee pays £1,500 annually for membership of the professional body, which she requires for her work.

h. Zipp has given Ruhee a loan of £20,000 on 6 June 2020. The interest rate of the loan is 1%. Ruhee has repaid £10,000 of the loan during the year. Other information 

i. During the tax year, Ruhee received bank deposit interest of £8,000 and dividends of £7,000. 

j. During the tax year 2020-21, Ruhee made Gift Aid donations totalling £3,200 to national charities. 

Required:

(a) Calculate the income tax payable by Ruhee for the tax year 2020-21. Provide explanations, workings and show with zero if any income/benefit is not used. Assume that the official interest rate is 2.25%.

Answer rating: 100% (QA)

The income tax payable by Ruhee for the tax year 202021 is calculated as follows Gros... View the full answer