Reference no: EM133110932
Question - Nick Chang is a qualified Accountant working for Dreams Ltd as the Head of Finance. The following information is available for the tax year 2021/22:
1. During the tax year Nick was paid a gross annual salary of £63,600 by Dreams Ltd. Income tax of £20,500 was deducted from this figure under PAYE.
2. In addition to his salary, Nick received two bonus payments from Dreams Ltd during the tax year. The first bonus of £5,300 was paid on 30 April 2021 and was in respect of the year ended 31 December 2020. Nick became entitled to this bonus on 15 April 2021. The second of £4,600 was paid on 31 March 2022 and was in respect of the year ended 31 December 2021, Nick became entitled to this second bonus on 20 March 2022.
3. Throughout the tax year, Dreams Ltd provided Nick with a petrol car which has a list price when new of £24,500. The car cost Dreams Ltd £21,200, and it has an official CO2 emissions rate of 142g/km. Nick made a capital contribution of £6,000 towards the cost of the car when it was first provided to him. Dreams Ltd also provided Nick with fuel for private journeys. The car was registered after 6th April 2020.
4. Dreams Ltd has provided Nick with living accommodation since 1 January 2010. The company had purchased the property in 2007 for £170,000, and it was valued at £190,000 on 6th April 2021. Improvements costing £17,000 were made to the property during June 2017. The annual value of the property is £7,100.
5. Throughout the tax year Dreams Ltd provided Nick with two mobile telephones. The telephones had each cost £300 when purchased by the company in January 2021.
6. On 5 May 2021, Dreams Ltd paid Nick's ACCA Professional membership fee of £400. Nick is required to be a member of the professional body for his job.
Other information:
1. During the tax year Nick received building society interest of £5,200 and dividends of £2,800.
2. On 4 August 2021, Nick received a premium bond prize of £100.
3. During the tax year Nick made gift aid donations totalling £3,200 (net) to national charities.
4. Nick had Property income of £9,000 during the year. Nick paid repair cost of £1,000 and Mortgage interest was £2,000 related to the property.
Required - Calculate the income tax payable by Nick Chang for the tax year 2021/22. Assume the official rate of interest is 2.25%. Show all the relevant working clearly.