PERSONAL TAX EMPLOYMENT Kris McCulloch

EMPLOYED OR SELF EMPLOYED CONTRACT OF SERVICE OR CONTRACT FOR SERVICE

CONTRACT OF SERVICE THE EMPLOYER IS OBLIGED TO OFFER THE EMPLOYEE WORK. THE EMPLOYEE IS OBLIGED TO ACCEPT THIS WORK

CONTRACT OF SERVICE THE EMPLOYER IS OBLIGED TO OFFER THE EMPLOYEE WORK. THE EMPLOYEE IS OBLIGED TO ACCEPT THIS WORK EMPLOYER CONTROLS HOW THE WORK IS CARRIED OUT

CONTRACT OF SERVICE THE EMPLOYER IS OBLIGED TO OFFER THE EMPLOYEE WORK. THE EMPLOYEE IS OBLIGED TO ACCEPT THIS WORK EMPLOYER CONTROLS HOW THE WORK IS CARRIED OUT COMMITTED TO WORK FOR A SPECIFIC NUMBER OF HOURS AT A SPECIFIC LOCATION

CONTRACT OF SERVICE THE EMPLOYER IS OBLIGED TO OFFER THE EMPLOYEE WORK. THE EMPLOYEE IS OBLIGED TO ACCEPT THIS WORK EMPLOYER CONTROLS HOW THE WORK IS CARRIED OUT COMMITTED TO WORK FOR A SPECIFIC NUMBER OF HOURS AT A SPECIFIC LOCATION MUST DO THE WORK HIMSELF

CONTRACT OF SERVICE THE EMPLOYER IS OBLIGED TO OFFER THE EMPLOYEE WORK. THE EMPLOYEE IS OBLIGED TO ACCEPT THIS WORK EMPLOYER CONTROLS HOW THE WORK IS CARRIED OUT COMMITTED TO WORK FOR A SPECIFIC NUMBER OF HOURS AT A SPECIFIC LOCATION MUST DO THE WORK HIMSELF NO FINANCIAL RISKS

CONTRACT OF SERVICE THE EMPLOYER IS OBLIGED TO OFFER THE EMPLOYEE WORK. THE EMPLOYEE IS OBLIGED TO ACCEPT THIS WORK EMPLOYER CONTROLS HOW THE WORK IS CARRIED OUT COMMITTED TO WORK FOR A SPECIFIC NUMBER OF HOURS AT A SPECIFIC LOCATION MUST DO THE WORK HIMSELF NO FINANCIAL RISKS ENTITLED TO HOLIDAYS AND SICKNESS PAY

BASIS FOR ASSESSMENT RECEIPTS BASIS

EXAMPLE SUE RECEIVES HER SALARY ON THE LAST DAY OF THE MONTH. IN THE YEAR TO 31 DEC 2016 HER SALARY IS £1,000/MONTH. IN THE YEAR TO 31 DEC 2017 HER SALARY IS £1,100/MONTH. WHAT IS HER TAXABLE EMPLOYMENT INCOME FOR 2016/17? WOULD IT BE DIFFERENT IF SHE WAS PAID IN ADVANCE?

EXAMPLE 30 APR 2016 TO 31 DEC 2016 (9 MONTHS)£ X £ JAN 2017 TO 31 MAR 2017 (3 MONTHS)£ X £1100 TOTAL£12300

EXAMPLE 1 MAY 2016 TO 1 DEC 2016 (8 MONTHS)£ X £ JAN 2017 TO 1 APR 2017 (4 MONTHS)£ X £1100 TOTAL£12400

BONUS For the Y/EDate of Payment/Entitlement£ 31 Dec April 20158, Dec April , Dec April 20179, Dec April 20187,500 What is the taxable bonus in 2016/17

6 Apr Apr Apr 2016 £10,000 4 Apr 2017 £9,500 For the Y/EDate of Payment/Entitlement£ 31 Dec April 20158, Dec April , Dec April 20179, Dec April 20187,500

EXPENSES WHOLLY, EXCLUSIVELY AND NECESSARY

EXPENSES APPROVED MILEAGE RATE

CARS – FIRST 10,000 MILES45P PER MILE CARS – ADDITIONAL MILEAGE25P PER MILE MOTOR CYCLES24P PER MILE BICYCLES20P PER MILE

QUESTION CRAIG TRAVELS 12,000 MILES IN 2016/17 FOR BUSINESS IN HIS OWN CAR. HIS EMPLOYER PAYS 42P PER MILE. HOW MUCH OF CRAIGS MILEAGE IS TAXABLE?

ANSWER INCOME(12,000 X 42P)5,040 LESS:ALLOWABLE EXPENSES 10,000 X 45P4,500 2,000 X 25P 500 5,000 TAXABLE AMOUNT £40

EXPENSES APPROVED MILEAGE RATE PROFESSIONAL SUBSCRIPTIONS

EXPENSES APPROVED MILEAGE RATE PROFESSIONAL SUBSCRIPTIONS DONATIONS UNDER PAYROLL DEDUCTIONS

EXPENSES APPROVED MILEAGE RATE PROFESSIONAL SUBSCRIPTIONS DONATIONS UNDER PAYROLL DEDUCTIONS CONTRIBUTIONS TO COMPANY PENSIONS SCHEMES

QUESTION STEVE IS EMPLOYED AS AN INSURANCE SALESMAN WITH A SALARY OF £950 PER MONTH. HE HAS MADE THE FOLLOWING PAYMENTS DURING THE 2016/17 TAX YEAR: CONTRIBUTION TO COMPANY PENSION£342 SUBSCRIPTION TO CHARTERED INSURANCE INSTITUTE£100 PAYROLL GIVING TO OXFAM£200 GYM MEMBERSHIP – TO MEET CLIENTS£150 CALCULATE STEVE'S TAXABLE EMPLOYMENT INCOME FOR THE YEAR.

QUESTION £ SALARY11400 LESS ALLOWABLE EXPENSES TAXABLE INCOME

QUESTION £ SALARY11400 LESS ALLOWABLE EXPENSES PENSION342 GAYE200 SUBSCRIPTION TAXABLE INCOME10,758

TRY THIS SUE IS EMPLOYED AS AN SALES REP WITH A SALARY OF £1000 PER MONTH UP TO NOVEMBER 2016, AND £1,100 PER MONTH THEREAFTER. SHE IS PAID MONTHLY IN ARREARS. SHE HAS MADE THE FOLLOWING PAYMENTS DURING THE 2016/17 TAX YEAR: CONTRIBUTION TO COMPANY PENSION£400 PAYROLL GIVING TO SHELTER£150 GOLF MEMBERSHIP – TO MEET CLIENTS£200 CALCULATE SUES TAXABLE EMPLOYMENT INCOME FOR THE YEAR.

SUE 30 APR 2016 TO 31 NOV 2016 (8 MONTHS)£ X £ DEC 2016 TO 31 MAR 2017 (4 MONTHS)£ X £1100 TOTAL£12400

SUE £ SALARY12400 LESS ALLOWABLE EXPENSES PENSION400 GAYE TAXABLE INCOME11,850

BENEFITS – COMPANY CAR BENEFIT = LIST PRICE X PERCENTAGE BETWEEN 7% AND 37% DEPENDING ON CO2 EMISSIONS

BENEFITS – COMPANY CAR BENEFIT = LIST PRICE X PERCENTAGE BETWEEN 7% AND 37% DEPENDING ON CO2 EMISSIONS Co2 emissionspercentage < 50g/km7% 51 g/km – 75 g/km11% 76 g/km – 94 g/km15% 95 g/km16%

BENEFITS – COMPANY CAR BENEFIT = LIST PRICE X PERCENTAGE BETWEEN 7% AND 37% DEPENDING ON CO2 EMISSIONS INCREASES BY 1% FOR EACH WHOLE 5G/KM 3% ADDED FOR DIESEL Co2 emissionspercentage < 50g/km7% 51 g/km – 75 g/km11% 76 g/km – 94 g/km15% 95 g/km16%

BENEFITS – COMPANY CAR BENEFIT = LIST PRICE X PERCENTAGE BETWEEN 7% AND 37% DEPENDING ON CO2 EMISSIONS ELECTRIC CARS TAXED AT 7% Co2 emissionspercentage < 50g/km7% 51 g/km – 75 g/km11% 76 g/km – 94 g/km15% 95 g/km16%

BENEFITS – COMPANY CAR MAXIMUM OF 37%

QUESTION CO2 emissionPercentage 84 g/km Petrol 72 g/km Diesel 138 g/km Petrol 228 g/km Petrol

QUESTION CO2 emissionPercentage 84 g/km Petrol15% 72 g/km Diesel 138 g/km Petrol 228 g/km Petrol

QUESTION CO2 emissionPercentage 84 g/km Petrol15% 72 g/km Diesel14% 138 g/km Petrol 228 g/km Petrol

QUESTION CO2 emissionPercentage 84 g/km Petrol15% 72 g/km Diesel14% 138 g/km Petrol24% 228 g/km Petrol

QUESTION CO2 emissionPercentage 84 g/km Petrol15% 72 g/km Diesel14% 138 g/km Petrol24% 228 g/km Petrol37%

FUEL BENEFIT CALCULATED AS PERCENTAGE X £22,200 NO BENEFIT IF EMPLOYEE PAYS ALL PRIVATE FUEL

QUESTION CAR WITH CO2 EMISSIONS OF 130 G/KM, LIST PRICE OF £24,000. THE CAR RUNS ON PETROL WHICH THE COMPANY PAYS FOR. EMPLOYEE CONTRIBUTES £50/MONTH FOR THE USE OF THE CAR AND £20 FOR PETROL WHICH DOESN’T COVER ALL HIS PRIVATE USE.

QUESTION 130 G/KM = 22%

QUESTION 130 G/KM = 22% 22% X 24,000£5,280

QUESTION 130 G/KM = 22% 22% X 24,000£5,280 22% X 22,200 £4,884

QUESTION 130 G/KM = 22% 22% X 24,000£5,280 22% X 22,200 £4,884 £10,164

QUESTION 130 G/KM = 22% 22% X 24,000£5,280 22% X 22,200 £4,884 £10,164 PRIVATE CONT £600

QUESTION 130 G/KM = 22% 22% X 24,000£5,280 22% X 22,200 £4,884 £10,164 PRIVATE CONT £600 £9,564

QUESTION DIESEL CAR COSTING £22,000 WITH CO2 EMISSIONS OF 170 G/KM. THE COMPANY PAYS ALL RUNNING COSTS INCLUDING DIESEL. NO CONTRIBUTION IS MADE BY THE EMPLOYEE.

QUESTION DIESEL CAR COSTING £22,000 WITH CO2 EMISSIONS OF 170 G/KM. THE COMPANY PAYS ALL RUNNING COSTS INCLUDING DIESEL. NO CONTRIBUTION IS MADE BY THE EMPLOYEE. ANSWER:£15,028