Sifan is a personal tax client of your firm. She is self-employed, running her own running shop in Whitechapel. Her profits and loss account for the year ended 31 March 2024 is as follows: Gross profit 306,000 Less: Wages and salaries (Note 1) 85,600 Repairs and renewals (Note 2) 15,400 Motor expense (Note 3) 12,000 Professional fees (Note 4) 5,000 Travel and entertaining (Note 5) 26,000 Depreciation 12,000 Other expenses (Note 6) 78,000 (234,000) Net profit for year 72,000 Note 1. Wages and salaries Includes 31,000 paid to Sifan's husband. He works full-time in the business as a sales assistant. The other sales assistants, doing identical jobs, are paid 15,000 a year each. Sifan paid her son 900 for redecorating the shop. Note 2. Repairs and renewals This figure was made up of 3,000 for minor repairs to the treadmill and 12,400 to purchase a new treadmill. Note 3. Motor expense It has been agreed with HMRC that one-quarter of motor expenses relate to private use. Note 4. Professional fees This comprised 1,500 for accountancy, 1,000 for capital gains tax advice for Sifan, 700 legal fees chasing trade debts and 1,800 for legal fees renewing a short lease. Note 5. Travel and Entertaining This includes 5,200 for Sifan's business travelling expenses, 1,300 for travel between her home and her shop, and 700 for entertaining runner customers. Note 6. Other expenses Included 100 in respect of a parking fine incurred by Sifan for parking outside her shop, 500 for Sifan's annual tennis club subscription, a political donation of 50 and staff entertaining costing 2,000. Note 7. Use of Office Sifan used one of the seven rooms in her private home as an office for the business. The total running costs of the house for the year were 5,300. These costs have not been included in the accounts. Note 8 Private Telephone Sifan uses her private phone to make business calls. The total cost of the phone for the year was 600 of which 40% related to business calls. The cost of the calls has not been included in the accounts. Note 9 Goods for Own Use Sifan took records out of stock for her own collection. These cost 400 with a normal mark up of 25%. No adjustment has been made in the accounts. Note 10 Capital Allowances The TWDV on the Main Pool on 1st April 2023 was 7,000. On 1st June 2023 she sold some plant for 500 which had cost 800 three years earlier. Her other income for 2023/2024 comprised: ISA interest 300 Dividend income 4,000 Bank interest received 1,200 During the year Sifan gave 240 under gift aid to Oxfam a registered charity. Requirement a) Calculate Sifan's taxable trading profit for the year ended 31 March 2024, making clear your treatment of each item. (15 marks) b) Calculate her income tax liability for 2023/24

The following tax rates and allowances are to be used in answering the questions: Rates of Income Tax Basic rate 0 - 37,700 20% Higher rate 37,701 - 125,140 40% Additional rate over 125,140 45% Savings income is taxed at 0% up to the starting rate limit of 5,000 if NSI is below this figure, then 20% up to the higher rate threshold, then 40% up to the additional rate threshold, then 45%. The personal savings allowance is 1,000 for basic rate taxpayers, 500 for higher rate taxpayers and nil for additional rate taxpayers. Dividend income is taxed at 8.75% up to 37,700; 33.75% between 37,701 and 125,140; and then 39.35% over 125,140. The dividend allowance is 1,000. Personal Allowances Personal allowance = 12,570 If adjusted net income exceeds 100,000 the basic personal allowance is reduced by one-half of the excess. Car benefit: Applicable percentage: CO2 emissions Applicable percentage Zero 2% 1-50g/km 2% to14% 51g/km to 54g/km 15% 55g/km to 59g/km 16% 60g/km to 64g/km 17% 65g/km to 69g/km 18% 70g/km to 74g/km 19% 75g/km 20% Each additional 5g/km 1% increase Car Fuel Benefit The statutory figure is 27,800. Mileage rates Cars: First 10,000 business miles 45p Additional business miles 25p Rates of Interest Official rate of interest 2.25% National Insurance Contributions Class 1 Employees The rate of 12% is paid on earnings between 12,570 and 50,270. The rate of 2% is paid on all earnings above 50,270. Employers - Secondary Threshold The rate of 13.8% is paid on all earnings over 9,100. Annual Employment Allowance is 5,000. Class 1A Employers pay 13.8% on taxable benefits provided to employees. Corporation Tax Main rate (250,000~) Small profits rate (~50,000) 25% 19% Profit Threshold 1,500,000 Marginal relief = (U - A) x N/A x 3/200 U = Upper limit; A = Augmented profits; N = Taxable total profits Capital Allowances Writing down allowance (WDA) per year: Plant and Machinery main pool 18% Special rate pool 6% Cars: New motor cars with zero CO2 emissions - electric cars 100% CO2 emissions between 1 and 50 grams per kilometre 18% Capital Gains Tax Annual exempt amount 6,000 Standard rate of CGT within the basic rate band 10% Higher rate of CGT 20% Value Added Tax Standard rate 20%