"\r\nTAXATION FUNDAMENTALS\r\n\r\nCOURSEWORK \r\n\r\nTaxation FundamentalsBAF–5–TAF\r\n\r\n(Semester 1: Full-time)\r\n\r\nMODULE LEADER: \r\n\r\nBAAF 2nd Year\r\n\r\nThe coursework must be submitted via submission inbox in Moodle\r\n\r\nTaxation Fundamentals Coursework\r\n\r\n1.\tSUBMISSION\r\nThis report has a 40% weighting in calculating your overall module mark. It must be electronically produced in a SINGLE WORD DOCUMENT.\r\n\r\nThe work must be submitted via Moodle by THURSDAY 17NOVEMBER2016. You must keep a duplicate copy of all work submitted for assessment. \r\n\r\n2.\tSpecific instruction relating to the coursework\r\n\r\nFor your guidance - the report should include the following:\r\no\tTitle/cover (including the name/number of the course, the name of the module and coursework, your date of birth,your name and student number, the date and the word-count) \r\no\tPage of contents\r\no\tMain body of report (Scenario one, two and three)\r\no\tBibliography (using Harvard style of referencing)\r\no\tAppendices.\r\n\r\nThe attention of every student is drawn to the warning in the course guide on late submission of coursework, mitigating circumstances and plagiarism. For guidance on copyright and referencing see the following section ‘Guidance on referencing’.\r\n\r\nGuidance on referencing\r\n(Supplied by Academic Misconduct Officer)\r\nCorrect referencing is an academic skill that you will be assessed on.\r\n\r\nCorrect referencing demonstrates that you have read appropriately on the subject, shows that you are acknowledging the sources you have used (that you are not trying to cheat) and provide information on useful sources of information to your reader.\r\n\r\nDoing it correctly demonstrates professionalism. Doing it incorrectly will lead to reduced marks and possibly to disciplinary action, which includes the possibility of having your studies terminated.\r\n\r\nI do see cases where the student has clearly deliberately attempted to cheat. These are dealt with very firmly. However, most cases I see are where students have either referenced poorly or not bothered with referencing at all. Otherwise good work often fails in these circumstances.\r\n\r\nGuidance on referencing itself is available from the resources listed at the end of this sheet. If you have any concerns about your referencing ask for help before submitting.\r\n\r\nFurther help is available on all academic matters from the ‘Academic Assistant’ at http://www.blc.lsbu.ac.uk/aa/aa/\r\n \r\nTaxation Fundamentals Coursework\r\n\r\nDisplayyour date of birth prominently on the cover page to your assignment.\r\n\r\n\r\nBACKGROUND\r\nYou have been contacted by your good friend Mary Phillips. She is aware that you are studying taxation at University, and she would like you to help some of her family members with some tax issues.\r\n\r\nYou are required to deal with ALL 3 PARTS\r\n\r\nEach of the 3 Parts will carry equal marks.\r\n\r\n\r\nPART 1\r\n\r\nSusan Phillips has recently received a major promotion at work and she will now be the Financial Controller for her employer, a listed company.\r\n\r\nFrom 6 April 2016Susan will be receiving a greatly enhanced salary(see note 1) and employee benefits (paid by her employer) in her new position and now would like to know how much tax she will have to pay in the current tax year.Susan also has other income as detailed below.\r\n\r\nThe proposed package of benefits is as follows:\r\n\r\n1.\tCar – her own choice up to the value of £25,000 (see note 2)\r\n2.\tUnlimited fuel for car\r\n3.\tSusan will also have use of a company flat (see note 3)\r\n4.\tAccess to a personal computer for home and work use (see note 4)\r\n\r\nOther Income\r\nIn the tax year 2016/2017Susan also received interest on her building society account equal to 5% of her gross salary.\r\n\r\nIn addition she has a portfolio of investments and in the tax year 2016/2017she received dividend income equal to 10% of her gross salary.\r\n\r\nSusan also makes charitable donations (which qualify as gift aid) to the RSPCA. The net value of these donations is equal to 2% of hergross salary.\r\n\r\nSusan is entitled to the basic personal allowance and she does not belong to a pension scheme.\r\n\t\t\t\t\t\r\nNote 1\r\nUse your date of birth to work out her salary to the nearest £. \r\nSimply reverse your date of birth and divide by tento getSusan's annual salary.\r\nE.g. a date of birth of 22 August 1991(22/08/91) produces a salary of £91,082. (910822/10)\r\n\r\nNote 2\r\nChoose a car (your personal preference) from the web for Susan’s new vehicle. Give full details of make, model, list price, type of engine and CO2 emission. Print off the details of the car from the website you used. \r\n\r\nNote 3\r\nSusan moved into the company flat in Limehouse on 6 May 2016. The property was purchased by her employer in 2012 for £180,000 and the company had spent £21,000 in August 2013 on improvements to the property. \r\n\r\nThe property currently had a market value of £245,000 and has a rateable value of £9,600. The company provided all the furniture at a cost of £35,000, Susan is required to pay all the utility bills for the property.\r\n\r\nNote 4\r\nOn 6 July 2016the company lent Susan a computer costing £5,000 for use when commuting and in her home which she used for both business and private purposes.\r\n\r\nREQUIRED:\r\nPrepare a detailed calculation ofSusanPhillips’s income tax payable and her NICs for 2016/2017. \r\n\t\t\t*(income= nearst £) *(tax –nearest penny)\r\nYour calculation should be set out in a way that Susan (not a tax expert) can easily understand.\r\n\r\n\r\nPART 2\r\nWrite an accompanying report that explains your calculations in Part 1 to Susan in user friendly terms. Remember – Susan does not have much knowledge of Taxation issues!\r\n\r\nSuggested word length = 700 words/ max 850 words\r\n\r\n\r\nPART 3\r\nJames Phillips is about to start his own business, and he is forming a company of which he will be a director. The company will take on 12 employees who will be paid a monthly salary.\r\n\r\nJames is aware that the company will have to operate the PAYE system and but he has no knowledge as to how PAYE works.\r\n\r\nREQUIRED:\r\nWrite a briefing paper for James that gives a ‘user friendly’ guide to the PAYE system. Your paper should include as a minimum the following areas:\r\n\r\n•\tTax codes and tax code suffixes,\r\n•\tOperation of the system,\r\n•\tReal Time Information,\r\n•\tPAYE forms,\r\n•\tEnd of year returns,\r\n•\tKey dates,\r\n•\tPenalties for non-compliance\r\n\r\nSuggested word length = 700 words/max 850 words\r\n\r\nMarking guide for Taxation Fundamentals Coursework\r\n\r\nBA (Hons) Accounting and Finance (BAAF)\r\n\r\nStudent Name:\t\t\t\t\t Student No:\r\n\t\t\t\r\n\tMarks available\tMarks obtained\tComments\r\nPart 1\t(30)\t\t\r\nSalary\r\nCar benefit\r\nFuel benefit\r\nRV\r\nExpensive accom\r\nFurniture \r\nP.C.\r\nBSI\r\nDividends\r\nCharitable donation\r\nPersonal allowance\r\nNIC’s\r\nTax calculation\r\n\t2\r\n3\r\n2\r\n2\r\n2\r\n2\r\n1\r\n2\r\n2\r\n2\r\n4\r\n1\r\n5\t\t\r\nPart 2\t(30)\t\t\r\nSalary\r\nCar benefit\r\nFuel benefit\r\nRV\r\nExpensive accom\r\nFurniture \r\nP.C.\r\nBSI\r\nDividends\r\nCharitable donation\r\nPersonal allowance\r\nNIC’s\r\nTax calculation\r\n\t2\r\n\t\r\nPart 3\t(30)\t\t\r\nUser friendly report on PAYE\r\n•\tTax codes and prefixes,\r\n•\tOperation of the system,\r\n•\tReal Time Information,\r\n•\tPAYE forms,\r\n•\tEnd of year returns,\r\n•\tKey dates,\r\n•\tPenalties for non- compliance.\t4 or 5 marks per heading\t\t\r\n\t\t\t\r\nPresentation \t(10)\t\t\r\nBibliography and referenced citations in text and cross referencing\r\n\r\n\t5\t\t\r\nGeneral presentation and English.\r\n\r\n\t5\t\t\r\nOther Overall Comments\r\n\r\n\r\n\r\n\r\nTable of ContentsPart 1 ....................................................................................................................................................... 2Part 2 ....................................................................................................................................................... 6Part 3 ....................................................................................................................................................... 9References ............................................................................................................................................ 13Part 1The calculation for various tax and NIC related elements for Susan can be given as follows:SalaryA. Salary 94102- Personal Allowance 11000= Taxable Salary 83102B. Salary under 20% Tax 32000C. Tax @ 20% (20% of B) 6400D. Salary Under 40% Tax 51102E. Tax @ 40% (40% of D) 20440.8Total Tax on Salary (C+E) 26840.8Car BenefitA. P11D Value of Car 24690B. CO2 Tax Rate (Based on 94m/Kg emissions and 15%petrol fuel)C. BIK Value (A x B) 3703.5D. Tax Bracket (Tax Bracket of Susan) 40%E. Tax Payable (C x D) 1481.4Fuel BenefitA. Fuel BenefitValue 22200B. CO2 Tax Rate 15%C. Tax Payable (A xB) 3330Accommodation ValueA. Gross Rateable Value (Given) 9600B. Employee Rent 0 C. Interest Rate (Official Rate) 3%D. Standard Value (A x C) 288E. Original Buying Price 180000F. Improvements 21000G. Total (E + F) 201000H. Deductions Available 75000I. Gross Value (G – H) 126000J. Official Interest Rate 3%K. Additional Charge (I x J) 3780L. Total Annual tax payable (D + K) 4068M. Total Tax for 11 Months (L/12 * 372911)Furniture ValueA. Furniture Value 35000B. Annual Value 20%C. Benefit in Kind Value (A x C) 7000D. Tax Bracket 40%E. Tax Payable (C x D) 2800F. Tax Payable for 11 Months (E/12 * 256711)Computer ValueA. Computer Value 5000B. Annual Value 20%C. Benefit in Kind Value (A x B) 1000D. Tax Bracket 40%E. Tax Payable (C x D) 400F. Tax Payable for 9 Months (E/12 300* 9) Building Society InterestA. Interest Income 4705B. Tax Bracket 40%C. Tax Payable (A x 1882B)Dividend IncomeA. Dividends Received 9410B. Tax Free Dividends 5000C. Taxable Dividends (A 4410– B)D. Tax Bracket 38.10%E. Tax Payable (C x D) 1680.21Charitable DonationA. Charitable Donation 1882B. Gift Aid Value (A x 1.25) 2352.5C. Tax Bracket 40%D. Claim Back % 20%E. Claim Back Tax Value (B 470.5x D)Total Tax PayableA. Salary 26840.8B. Car 1481.4C. Fuel 3330D. Accommodation 3729E. Furniture 2567F. Computer 300G. Interest Income 1882 H. Dividend Income 1680I. Charitable Donation 470DeductionJ. Total 41340(A+B+C+D+E+F+G+H-I)NIC CalculationA. Salary 94102B. Weekly Income (A / 52) 1809.654C. NIC Exemption 155D. NIC Income (B – C) 1654.654E. NIC Income @ 12% (827 – 672155)F. NIC Payable @ 12% (E x 80.612%)G. NIC Income @ 2% (D – E) 982.7H. NIC Payable @ 2% (G x 19.72%)I. Total NIC Payable (F + H) 115.7931J. Annual NIC Payable (I x 52) 6021.24"