Reference no: EM13558824
Danni joined a UK company, Clifton plc, as purchasing director on 1 July 2013, based at their Nottingham office.
Until 31 December 2013, Danni's monthly salary as a director was £6,000. From 1 January 2014, her salary increased by 2.5%.
Clifton plc awarded Danni a bonus of £10,000 in relation to a special purchasing project during Clifton plc's period of account ended 31 March 2014. This bonus was determined by the board of directors on 15 March 2014, credited in the company's accounts on 10 April 2014, which was also the date when Danni became entitled to payment of the bonus. The bonus was paid to Danni on 31 May 2014.
From 1 July 2013, Danni traveled to Clifton plc's office in Nottingham from home using the Nottingham Tram Network. Danni bought a monthly tram season ticket at a cost of £42 per month for each of the months from July 2013 to December 2013.
From 1 January 2014, Danni was seconded to Clifton plc's office in Manchester for a period of 6 months. Danni bought a monthly rail season ticket at a cost of £526 per month for each month of her secondment.
Danni also used her own car for journeys to meet clients in Leicester, which is 24 miles from Nottingham. She made five return journeys between 1 July 2013 and 5 April 2014. Clifton plc paid Danni 30p per mile for these journeys.
Danni is a member of the Chartered Institute of Purchasing and Supply (MCIP) and paid her annual membership fee of £155 on 31 December 2013. Danni is also a member of her local tennis club at which she sometimes meets potential suppliers for Clifton plc. The membership fee is £180 per month.
Clifton plc has a payroll giving scheme. Danni donated £50 per month through the scheme from 31 December 2013.
Required
(a) (i) Explain the rules which apply to a director for deciding when general earnings consisting of money are received for the purposes of employment income.
(ii) Using the rules you have explained in part (i), determine when the bonus awarded to Danni is received.
(b) Calculate Danni's employment income for 2013/14, giving a brief explanation for your treatment of each item.