Income Tax Liability1. Adjusted net income=net income- gross PPS - gross gift aid donation2. Personal allowance Std PA=£11,000When 'Adjusted net income'≥£100,000 Std PA 11000 Less: restriction(adjusted net income - 100000)*1/2 Adjusted PA'Adjusted net income'≥£122000,PA=03. Gift aid donation• Gross up=net gift aid donation *100/80• Extending the rate band32000(150000)+ gross gift aid donation• Adjusted net income=net income -gross gift aid donation4. Child benefit income tax charge: When £ 60,000≥ 'Adjusted net income'≥£50,000 %=(Adjusted net income -50000)/100 Round down child benefit income tax charge=%* child benefit received5. Authorized mileage allowancesUp to 10,000 miles 45pover 10,000 miles 25p6. Additional charge of living accommodation benefitAdditional benefit=(cost of providing accommodation – £75,000) × the official rate of interestwhich is time apportionment7. Benefit of use of assetsThe benefit assessed is the higher of - 20% x (MV when first provided –the price paid by employee) - rental paid by employer (if asset is rented)which is time apportionment8. Benefit of gift of assetsIf new asset is given : cost of the assetIf used assets is given : higher of - (MV when given –the price paid by employee) - (MV when first provided –benefits already assessed –the price paid by employee)9. Benefit of provision of a carTaxable car benefit= X%*(list price – capital contribution) * time proportion – payment by employee for use of the carEmission ≤50 g/km,X=7%51≤ Emission ≤75 g/km, X=11%76≤ Emission ≤94g/km, X=15%Emission =95g/km, X=16%Emission >95g/km, increase by 1% for every 5 g/km increaseX=(Emission-95)/5 Round downdiesel cars ：+ 3%Maximum：37%10. Benefit of Provision of fuelX%* £22,200 which is timeapportionment11. Provision of vansStandard benefit of £3,170£598 a year for private fuelwhich is time apportionment12.PPSGrossup=net PPS *100/80Extending the rate band 32000(150000)+gross PPSAdjusted net income=Netincome- gross PPS13.OPSEmployer’scontributions: trading profit - OPSEmployee’scontributions: employment income- OPS14.Furniture replacement reliefFurniturereplacement relief=MV of new furniture(same function)-resale value of oldfurniture15.Rent a roomGross rental income<= £7500, lower of -Property business income=0 -Property business income= normal calculation= gross rent – expenses – Furniture replacement reliefGross rental income> £7500, lower of -Property business income= normal calculationor, -Property business income= alternative calculation= gross rent -750016.PremiumLandlord:Premium is treated asproperty business income for the year of grant. P-P× 2% (n-1) Where:P = total premium n= duration of lease in yearsTenant: premium paid is treated as a tradingexpense(proportioned to month)P-P × 2% (n-1)*mn 1217.Class 1 NIC (on cashearnings)Primary: £1-£8,060per year Nil £8,061-£43,000per year 12% £43,001 and above per year 2%Secondary: £1-£8,112per year Nil £8,113and above per year 13.8%18.Class 1A NIC (on taxablebenefits) =taxablebenefits*13.8%19.Class 2 =£2.8*weeks20.Class 4(on trading profit:which is after loss relief) £1-£8,060per year Nil £8,061-£43,000per year 9% £43,001 and above per year 2%21.Payment of taxfor 16/17 : - 31.1.17 - first payment onaccount=1/2*(15/16 income tax payable+15/16 NIC Class 4) - 31.7.17 - second payment onaccount=1/2*(15/16 income tax payable+15/16 NIC Class 4) - 31.1.18 - final balancing payment= 16/17 income tax payable+16/17 NIC Class 4 tax -(15/16income tax payable+15/16 NIC Class 4) +16/17CGT +16/17 Class 2 Payment ofcapital gain tax : 31.1.18for 16/17 Payment ofClass 2: 31.1.18for 16/1722. Interest on late payment of tax: 3% * due amount(which is time apportionment) POAs- runs from 31.1.2017/31.7.2017 Final payment-runs from 31.1.201823. Penaltyon late balancing payment:- no more than 1 month,0 - no more than 6 month, 5%, (5% * (shouldpay - actual pay)) - more than 6 months, 10 - more than 12 months,15%24.Penaltiesfor late return: - thereturn filed after the filing date, 100 - morethan 3 months, 10 per day, at most 90 days - morethan 6 months, higher of 5%*tax due on return & 300 - morethan 12 months,higher of 100%/70%/5%*tax due on return & 300CGT1. Transfers between spouses/civil partner (A→B)A: less: costdeemed proceeds: less: rollover reliefGain taxed now(0)B:base cost=deemed proceeds-rollover relief2. Partial disposalProceeds ALess: selling costs (X) XLess:original cost* A /(A+B) (C)Chargable gain XA – MV of the part disposed ofB – MV of the remaining part of the asset3. Damaged assetAA + BA= compensation receivedB= unrestored value of asset4. Destroyed assetsCompensation receivedLess: costLess: rollover reliefGain taxed now(not reinvest)Base cost of the new asset= MV of the new asset - rollover relief5. Non wasting chattels(antiques and paintings)6. Wasting assets(copyright)Remaining cost is the key part in the computationFor example, if a taxpayer acquires a wasting asset with a remaining life of 40 years and disposes of it after 15 years, so that 25 years of useful life remain, only 25/40 of the cost is deducted in the computation.7. Principal private residencePPR relief is calculated asGain * period of occupation/period of ownershipThe letting relief is the lowest of The gain arising in the letting period not covered by PPR relief £40,000 The PPR relief already given8.Valuing quoted shareslower of:the ‘quarter-up’ value: lower quoted price + 1/2 × (higher quoted price – lower quoted price)the average of the highest and lowest marked bargains (ignoring bargains marked at special prices)9. Cost of shares(matching rules)Acquisitions on the same dayAcquisition in the next 30 days – FIFO basisShares in the share poolProforma of share poolShare pool No. CostAdditions X XDisposals (X) X X (X)10.TakeoverProceeds(cash received) ALess:original cost* A /(A+B) (C)Chargable gain Xwhere:A = cash element and;B = value of non cash element i.e market value at date of takeover11. Gift reliefAssets qualifying:Business assetsUnquoted shares in a trading companyQuoted shares in a personal trading company (> 5%)A: Deemed proceeds: less: costless: gift reliefGain taxed now(actual gain)B:base cost=deemed proceeds-gift reliefIf the company has chargeable non-business assets at the time of the giftgift relief will be:Total gain × MV of CBA / MV of CACBA = chargeable business assets (chargeable assets except investments)CA = chargeable assets (assets not exempt from CGT)12.Replacement of Business AssetsProceeds of old assetLess: costLess: rollover reliefGain taxed now(not reinvest)Base cost of the new asset= MV of the new asset - rollover reliefCorporation tax liability1. Proforma2. Computing the corporation tax liabilityCorporation tax payable is calculated as:TTP*CT rate for the financial year4. Chargeable Gains for Companiesproceeds:less: incidental cost on disposalnet proceedsless: costcapital exp.(enhancement cost)gain less:indexation allowance on costcost*(RPI卖-RPI买)/RPI买indexation allowance on enhancement costenhancement cost*(RPI卖-RPI提)/RPI提indexed gain5. Matching rules for shares - companies:same day9 days prior to disposalFA1985 pool: from 82.4.1 to 10 days prior to disposal(IA should be considered)6.Trading losses7. Self-assessment and payment of tax by large companiesInstallments are based on expected current year’s liability.The four quarterly installments will be made in months 7, 10,13 and 16 following the start of the accounting period. The installments are due on the 14th of the month.If an accounting period is less than 12 monthsEach installment = 3 × CT/n (n = no. of months in AP).Final installment always due by 14th of the 4th month following end of accounting period.Inheritance tax1.lifetime tax(1) CLT (donee pays tax)donee pays taxstep1: 7 yrs accumulation of other CLTs (tranfer date转让日往前7年内)step2: nil rate band available(nil rate band at transfer year- 7 yrs accumulation)step3: value of CLT (after exemptions)step4: calculate the IHT using 0%/20%(2) CLT (donor pays tax)donor pays taxstep1: 7 yrs accumulation of other CLTs (tranfer date转让日往前7年内)step2: nil rate band available (nil rate band at transfer year- 7 yrs accumulation)step3: net value of CLT (after exemptions)step4: calculate the IHT using 0%/25%step5: gross value of transfer (net value of transfer+ IHT paid by donor)2. Death tax on Lifetime transferif the donor dies within 7 yrs of making a PET/CLT, then the PET&CLT will need to calculate an additional death tax.step1: 7 yrs accumulation of PETs and gross value of CLTs if donor pay the lifetime tax (transfer date转让日往前7年内)step2: nil rate band available (325000 death year nil rate band- 7 yrs accumulation)step3: Gross value of CLT/PETstep4: calculate the IHT using 0%/40%step5: reduce the taper relief (if available)step6: deduct any lifetime tax already paid6. Death tax on death estatestep1: 7 yrs accumulation of PETs and gross value of CLTs if donor pay the lifetime tax (death date往前7年内)step2: nil rate band available(325000 death year nil rate band- 7 yrs accumulation)step3: value of death estatestep4: calculate the IHT using 0%/40%7. Value of death estateValue of death estate:ALL ASSETSexcept for:mortgaged asset (endowment mortgage is not deducted)legally enforceable debts (verbally promised is not deducted)funeral expensespouse exemptionValue added tax1. VAT = VAT exclusive amount × 20%2. VAT = VAT inclusive amount × 20/1203. VAT inclusive amount = VAT exclusive amount × 120/1004. Cash discountOutput VAT= sales revenue*(1-x%discount)*20%Adjustment is made if discount subsequently does not apply.5.VAT on fuelthe company only paid the business part: input VAT= business fuel *20%the company paid all fuel(business& private),however employee reimburse all the private fuel input VAT= full amount*20%, output VAT= private fuel*20%the company paid all fuel(business& private),and employee does reimburse all the private fuel:input VAT= full amount*20%, output VAT=Scale charge*20%6. Flat rate schemeflat rate percentage * tax inclusive income(std + zero +exempt supplies).