Explain an ethical viewpoint

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Reference no: EM133335611

Assignment:

Laura

(a) Laura was employed by Far plc until 30 September 2021 when she decided to take a career break. The following information is available for the tax year 2021/22:

Employment with Far plc

(i) A monthly salary of £12,000. In addition to her salary, on 12 May 2021 Laura was paid a profit related bonus of £7,058. The bonus was based on Far plc's results for the year end 31 December 2021.

(ii) In July 2021 Laura was given a bouquet of flowers by Far plc on the occasion of her marriage. The cost of the bouquet to Far plc was £48.

(iii) On 1 May 2021 Far plc provided Laura with an interest free loan of £50,000 which she used to purchase an antique vase. Laura repaid £10,000 of the loan on 30 June 2021 and repaid the balance of the loan when she ceased employment on 30 September 2021.

(iv) Far plc provided Laura with a home entertainment system for her personal use costing £6,000 on 6 April 2021. The company gave the home entertainment system to Laura for free when she left the company on 30 September 2021, although its market value at that time was £4,500.

(v) Laura contributed 5% of her monthly gross salary of £12,000 into Far plc's HM Revenue & Customs (HMRC) registered occupational pension scheme.

(vi) Far plc paid £21,500 PAYE for 2021/22 in relation to Laura's employment. Other information During the tax 2021/22 Laura received building society interest of £2,850 and dividends of £7,100.uired: (a) Calculate Laura's income tax payable for the tax year 2021/22.

(b) In 2020, Laura purchased a luxury yacht for her own use. Many of her friends wanted to borrow it for special occasions and, in May 2021, she began charging £1,000 per day for the use of the yacht. You have advised Laura that the hiring out of the yacht has resulted in taxable profits, but she has said that she does not wish to disclose them to HMRC.

Required: Briefly explain from an ethical viewpoint how you, as a trainee Chartered Certified Accountant, should deal with the suggestion from Laura that no disclosure is made to HMRC.

Reference no: EM133335611

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