Reference no: EM133141845 , Length: word count: 2000 words

Taxation Accounting Assignment Help and Solution - College Of Banking and Financial Studies, Oman - Assessment Writing Service

Assignment Title - Income Tax computation, Rental and Employment, and Self-employment Income, Capital Gain Tax and Oman Tax Law

Learning outcomes - This assignment is partially based on

1. Be able to explain, classify, compare, illustrate, and criticize various types of taxes including categorizing, computing, and assessing the Taxable income and liability relating to the individual using report writing skills. (currency in UK Pound)

2. Compute Property business income and Employment income and assess the various deductions and apply NIC for Employees and Employers. (currency in UK Pound)

3. Compute the Self-employment income, judge and justify the expenses deductible and non-deductible from Trading Profit including partnership, loss relief, and Basis of assessment (currency in UK Pound)

4. Be able to explain and compute the chargeable gains arising on individuals including report writing skills in respect of Chargeable assets, person, and disposals. (currency in UK Pound)

5. Demonstrate an understanding and application of the Omani Tax Law and withholding tax. (Currency in Omani Rial)

Question 1 - Income tax in the UK is levied at progressive rates; higher rates of income tax apply to higher bands of income. Tax is charged on total income from all earned and investment sources after deductions and allowances are subtracted. Capital Gains Tax is a tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value.

You are required to prepare a report, it should include the meaning of taxation, purposes of taxation, types of taxation, and classification of taxation. Also compare, illustrate, and criticize these taxes from various angles. You are required to include the capital gain tax incidence in your report. (word count 1800 words)

Question 2 - Mona is a UK resident working as an employee in a UK company. During the tax year 2021/22, she received a Salary of £80,000 and a bonus of £8,000. Also, she received a House Rent Allowance of £8,000 and a Transport Allowance of £10,000.

For the next tax year (2022/23), the Employer has provided the option to Mona to go for Accommodation instead of House rent allowance and Motor car instead of Transport Allowance. She is eligible to go for the accommodation, its annual value will be £6,000 and the cost of the house is £120,000. If she opts for the car, then she will get a petrol car costing £25,000 (list price of £30,000), CO2 emission of 124 gms/km. Also, she will get fuel benefits from the employer.

You are required to advise Mona whether to accept a Car and Accommodation from the employer. You have to substantiate your answer with a supporting calculation with tax savings.

To answer this question, assume the tax rate and allowances of 2021/22 will be applicable for 2022/23. (300-400 words)

Question 3 - Sami a sole trader started business in 2014 and prepares his Income statement by the end of March. The Recent Income Statement for the year ended 31 March 2022 is as follows:

		£
Sales		600,000
Less: Cost of Sales		(240,000)
Gross Profit		360,000
Add: other Income
Interest on debenture	19,000
Rental Income	2,000
Dividend Income	17,000	38,000
Less: Expenses:		398,000
Depreciation	20,000
Wages and Salaries	30,000
Interest Expense	14,000
Subscription	1,600
Donation	10,000
Bad and doubtful debt	4,000
Gift and Entertainment	5,000
Other Expense	4,400
Repairs and maintenance	17,000
Car Expenses	12,000
Car Lease Rent	14,000	-134,000
NET PROFIT		264,000

Note 1:

1. Sami is full-time working for his sole trader business, for that he has taken a salary of £4000 from the business.

2. Sami borrowed a loan from Bank for the purposes of a business as well as his sister's marriage. Total interest paid of £14,000 includes £3000 is for the loan of his sister's marriage. The remaining interest is for business purposes.

3. Sami used to visit a gym near his residence. He paid the annual membership fees of £200 from the business fund and included it in the heading as Subscription. Also, he paid a £600 subscription for the trade association and the balance all for business purposes.

4. Sami is very generous by giving various donations to a local charity and political party. From the business fund, he paid a local charity of £600, a National charity of £3,800, and for political party £5,600 during the year.

5. Sami gave so many loans to his staff, customers and suppliers. The staff who took a loan left his business and joined another large company. Sami has treated the remaining loan of £500 as Bad debt. Also, a customer who borrowed £400 has absconded and Sami treated that amount as bad debt. Balance out of bad and doubtful debts are related to the business.

6. Gift and Entertainment:

Sami arranged a family get-together in a hotel and spent £2000 from business money.

Gift of Chips packets costing £0.50 for 1000 customers

Gift of Cigarette packets to Staff each costing £5 each for 100 staff

Entertainment for customers £1000

Staff Entertainment £500

7. Other expenses include a Fine and penalty of £200 for throwing the waste product to the roadside, a £50 Parking fine of Sami, and a £100 parking fine of the Employees, balance all for normal general expenses incurred for the purposes of business.

8. Repairs and maintenance include both revenue and capital expenditures. Purchase of plant and machinery costing £10,000 and building repair costing 7,000 included in the cost of the repair.

9. Car Expenses:

Using a business car, Sami traveled 10,000 miles during the year, out of this, 3,000 miles is for personal use. But the total car expense has been shown in the income statement.

10. Sami has taken another car for business use on a lease basis. The CO2 emission of the car was 140 gm/km and paid the rent of £14,000.

11. The capital allowance of the business is £30,000 for the year-end 31 March 2022.

12. The business had a £20,000 trading loss for the year ended 31 March 2021.

Required -

a) Calculate the adjusted trading Profit of Sami for the year ended 31 March 2022.

b) Calculate the Class 2 and 4 NIC for the business of Sami.

c) Assume that Sami has submitted his Income tax return late and has not maintained the books and records.

- Explain the due date for submitting the return, calculate the penalty, if his tax liability for 2020/21 is 12,000.

- Explain how long Sami has to maintain books and records, what is the penalty for non-compliance of the above. (max. 100 words)

Question 4 - You are required to demonstrate a general understanding and application of the Oman Tax Law. While answering this question, you have to cover the authority to manage the tax issues in Oman, who is responsible to pay tax in Oman, the taxable incomes, exempt incomes based on Oman Tax Law, and the due date for filing the returns. (you are not expected to explain the withholding tax)

Attachment:- Taxation Accounting Assignment File.rar