QUESTION 2
SMITH’S EMPLOYMENT INCOME FOR 2008/09
Salary – £62,000
Car benefit (W1) -£5,264
Fuel benefit (W2) – £3,380
Workplace parking(EXEMPT) – £NIL
TOTAL EMPLOYMENT INCOME =£70,644

WORKING – CAR AND FUEL BENEFIT
Relevant %
Petrol – 15%
Diesel – 3%
plus (145g/km – 135g/km)=10g/km x1/5 =2%
Appropriate percentage= 15+3+2= 20%
List price = £22,870 +£3,450 (Extras) = £26,320
(W1) Car benefit = £26,320 x 20%=£5,264
(W2) Fuel benefit = £16,900 x 20%=£3,380

Assumption:
‘’Oliver is being provided with accommodation in the form of a one-bedroom apartment near the office, which he uses during the week while working in London’ this pre supposes that London might not be his regular abode. So he stays there so he can perform his duties better. This bears semblance of a Job-Related Accommodation. Let’s assume it is Non- job related-we do not have enough information to decide that it’s otherwise.

Note1: Calculations for benefit on the set should be for one year as we want Oliver’s Total benefits for the tax year 2008/09.The Feb.’08 date may have been relevant if the company had sold the TV set to Oliver.

Q.2
Smith’s Employment income for 2008/09
Salary: £62,000
Car benefit: £5,264
(22,870+3450)*20%
Fuel Benefit: £3,380
(16900*20%)
Parking Cost: Exempt
Employment income assessment: £70,644

Workings:
Car and Fuel Benefits:
Relevant %-( 18+x) %-For Diesel engines
X = (145g/km – 135g/km)/5=2
18+2=20%
Car benefit= 20%*£26,320(including extras)
£5,264
Fuel benefit=20%*£16,900
£3,380

Assumption: Previous year’s benefits were calculated correctly

OLIVER’S TAXABLE INCOME FOR 2008/09
Annual value: £7,200
Additional benefit
(£170,000 -£75,000)x6.25%= £5,938
Council tax: £1,400
Television(NOTE) 20% x £1200= £240
TOTAL TAXABLE BENEFIT = £14,778
NOTE: The tax year for 2008/09 runs from 6 April 2008 -5 April 2009.Oliver has had the television throughout the tax year.

QUESTION 2

SMITH’S EMPLOYMENT INCOME FOR 2008/09
Salary: £62,000
Car benefit (W1): £5,264
Fuel benefit(W2):£3,380
Free workplace parking (EXEMPT): £nil
Employment income= £70,644

WORKING: CAR AND FUEL BENEFIT
Relevant %
Petrol: 15%
Diesel: 3%
plus (145g/km -135g/km)= 10×1/5= 2%
Appropriate percentage= 20%
List price = £22,870 + £3,450= £26,320
(W1)- Car benefit
£26,320 x 20% = £5,264
(W2) – Fuel benefit
£16,900 x 20% = £3,380

Annual value – £7,200
Additional benefit
£(170,000 – 75,000) x 6.25% – £5,938
Council tax – £1,400
Television (NOTE)
£1200 x 20% x12/14 – £206
TOTAL TAXABLE BENEFIT =£14,744
NOTE:The tax year for 2008/09 runs from April 6 2008 – April 5 2009, Oliver has had the television since Feb 2008.

QUESTION 2
SMITH’S EMPLOYMENT INCOME FOR 2008/09

Salary -£62,000
Car Benefit (W1) – £4,211
Fuel Benefit (W2) -£3,380 Workplace parking(EXEMPT) – NIL

EMPLOYMENT INCOME = £69,591

WORKING – CAR AND FUEL BENEFIT
Relevant %

Fuel -15%
Diesel -3%
(145g/km – 135g/km)= 10g/km x1/5 -2%
% = 15+3+2= 20%

List price =£22870+£3450(Extras)=£26,320
W1- Car Benefit
£26,320 x 20% x12/15 =£4211
W2- Fuel Benefit
£16,900 x 20%=£3,380 (the basic figure for 2008/09 is £16,900)

Smith’s Employment income for 2008/2009
Salary: £62000
Car benefit: £1316
(22870+3450)*20%*3/12
Fuel Benefit: £845
16900*20%*3/12
Parking: Exempt
Employment income assessment: £64161