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Both Bob and Catherine are in their early 30s.

Bob Marston is a UK resident taxpayer with two different sources of income. He works part time as a project manager for five different clients in UK. A separate contract is drawn up for each project. Bob works to a specific deadline, expected output, and the fee to be paid. Bob only needs a computer to do his work, which he has purchased himself and works mainly from home.

Bob also works two days a week (Monday and Tuesday) as a Financial Accountant for a nearby Business School. He is provided with his own office at the Business School, where he is required to be at his desk between 8a.m. and 6 p.m. Bob also gets holiday pay and sick pay from the Business School.

Bob’s wife, Catherine Jones is a full time director for a pharmaceutical company, ITU group, which she joined on 6 July 2013. Her gross pay for 2013-14 was £100,000and paid income tax under PAYE of £26,950.

Catherine is provided with a company car for both business and private use. Details of the cars provided during 2013-14 are as follows:

a) A Nissan - with a list price of £15,700, and emissions of 129g/km, this was available from 6 July 2013 to 5 October 2013.

b) From 6 October to 5 April 2014, Catherine obtained a BMW with a list price of £32,010emissions of 143g/km.

c) ITU group paid for all the running costs of both these cars but Catherine contributed £150 per month for the private use of the BMW car. She reimbursed ITU group for the private fuel of the Nissan motor car. Both the cars are petrol–driven.

On 6 August 2013, the company lent Catherin £27,000 at an interest rate of 2% per annum; Catherine repaid £18,000 of the loan on 6 March 2014.

Catherine is provide with a mobile telephone and uses this telephone for both business and private calls.

Catherine’s other income included, interest from Government Securities of £14,210, dividends from UK companies of £2,322 and ISA interest of £240.

Required:

a) prepare a report to discuss and apply the criteria, which may be used to determine whether Bob Marston should be regarded as employed or self-employed.

b) Prepare an income tax computation for Catherine Jones for the tax year 2013-14.

c) find out the national insurance payable in relation to Catherine Jones for 2013-14. You should assume that Catherine Jones in not contracted out.

d) find out the national insurance payable by the ITU group.

e) Assume official interest rate is 4%.

Taxation, Accounting

  • Category:- Taxation
  • Reference No.:- M96029

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