KayPee

Hi
I'm having troubles with this question
I am to compute the employment income assessable on John in 2008/09.
John currently earns 62,000 GBP per year. He has the use of a Pontiac Solstice company car.The company paid 24,640 GBP for the car in January 2008, which included 3,450 of extras.The list price (without extras) at the time was 22,870.GBP.The car is diesel and emits 147g/Km of CO2.Diesel is provided free.John is also provided with free-work place parking at a cost to his employer 2150 per year.
Required: Work out John’s employment income for the tax year 2008/09?


My problem here is that the Question is not clear when the car was made available to John. Will I be right to assume he got it on January 2008.So he had it the whole of 2008/09??

John: Employment Income 2008/09
Salary-62,000
Benefits (W1)-8,644
Total Employment Income-70,644

W1: Benefits
Car and Fuel Benefits:
Car benefit= 20%*26,320
5,264
Fuel benefit=20%*16,900
3,380
parking Cost-Exempt
Total benefit=8,644

Am I right?

If John has had the car since Jan 2008.Do I have to multiply the car benefit by 15/12 since he had it for 15 months-3months preceding tax year 2008/09 or should that be 12/15? I 'm very confused.

GBP(British Pounds)

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lonely soul

Dear KayPee..

the tax year 2008/09 means that it is from 5th April 2008 to 6th April 2009
which means that if the car was from January 2008, till end of Dec 2008
therefore . 9/12 x car benefit

This is what I know & I think is right..
regards ...

bahp2008

how come you're multiplying it by 20%? is that the WDA? dunno just yet, still going through tax...

from my understandingof the question though, the car was purchased in january 08, therefore jan - march 08 would be part of the 07/08 comp, and then there would be a full 12 months attributable to his 08/09 comp, ie april 08 - march 09....where does december 08 come into it?

lonely soul

yeah its correct it is 20% 147 --- drop it to 145
145 - 135 = 10
10/5 = 2%
135 = 15% + 2% + 3% for diesel
Total = 20%