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Taxation Practices for the Country - Assignment Example

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The author of the "Taxation Practices for the Country" paper acting as tax adviser to Mills Ltd, which has a year-end 31st March, and has been asked, by the Personnel Manager, writes a report relating to the benefits package offered to certain grades of staff…
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Taxation Practices for the Country
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Download file to see previous pages The Personnel Manager is reviewing the company’s position regarding the provision of company cars and needs to know the general changes that are proposed to the taxation of company cars, both for the company and for the employees, for the next few tax years. From 6th April 2012, certain mangers are to be offered a petrol-driven 5 door hatchback, with CO2 emissions of 139g/km. The list price of the car is £18,000, including VAT, but the company has negotiated a 15% discount off this list price.

You have been asked to calculate the total cost to the company of purchasing and running one of these cars (excluding petrol), and the Capital Allowances available for the year ending 31st March 2013. In addition, you are required to calculate the benefit in kind for each manager, and hence the cost of the car to a manager whose marginal rate of income tax is 40%. Also, set out the facts that each manager needs to take into account when deciding whether to accept the petrol for private motoring.

1.3 The Marketing Director’s son (aged 18) has recently passed his driving test, and he is keen to provide the son with a car. An acquaintance has told him that it would be cheaper for the company to provide the car, especially if it were a low-emission car. The Director has identified such a car, and it has a list price of £9,600, including VAT. It has CO2 emissions of 99g/km, and it is petrol driven.

The Personnel Manager has asked you to explain why it may be cheaper for the company (rather than the Director to provide a car privately) to provide a car for the son, and if the company does so provide the car, to investigate the costs (both for the company and the Managing Director) and Capital Allowances available for providing the car for his son.
The company has 2 vans of less than 3,500kg. The drivers commute from home to work in these vans each day, as they are allowed to keep them overnight at home. All fuel for the vans is paid for by the company. The drivers have both signed a declaration to state that they do not use the vans for private use apart from driving to and from work.  ...Download file to see next pagesRead More
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Taxation Practices for the Country Assignment Example | Topics and Well Written Essays - 1500 Words - 9. https://studentshare.org/finance-accounting/1789659-taxation.
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