UGB 225 Business Taxation Alternative Assessment
Learning outcomes
Outcomes Assessed: All This assessment covers the following learning outcomes from the module.
Key Information Length:
Format: Weighting:
Answer ALL QUESTIONS .This is an individual assignment of 3,000 words. (+ or – 10%)
Report 100% of the marks for the module
Students are required to submit their assignments through Turnitin on Canvas then to JIRA. Only Assessments submitted through JIRA and Canvas will be marked.
Assignment Brief Please note that this is an individual assignment and the policy of the University on Cheating, Collusion and Plagiarism “applies.
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Question 1: Linda’s income statement for the year ended 31 March 2021 is as follows: Sales Less: Cost of Sales Gross Profit Add: Rents receivable Bank interest receivable Profit on sale of non-currentasset Less: Wages and salaries Business rates and insurance Heating and lighting Repairs andrenewals Telephone Motor Expenses Sundry expenses Bad and doubtful debts Credit card interest Loss on sale of non-current asset Depreciation Net profit for the year £ £ 82,500 37,200 45,300 1,200 80 510 1,790 47,090 22,620 1,750 2,170 4,280 880 3,250 1,650 640 120 70 2,500 39,930 7,160 Notes: a) Linda draws a salary of £250 per week from the business. This is included in the wages and salaries figure.
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b) Repairs and renewals are as follows: £ Decorating of business premises 380 Installation of new improved heating system 3,700 Minor repair 200 4,280 c) It has been agreed with HMRC that one-quarter of telephone costs and one-fifth of motor expenses relate to private use. d) Sundry expenses include business entertainingof£520. e) Trade debts written off in the year amounted to £440 and £200 has been set aside as a general allowance (or provision) for bad and doubtful debts. Required: Compute Linda’s tax adjusted trading profit (before capital allowances) for the year ended 31 March 2021. (25marks)
Question 2 : a) How do you distinguish between an individual who is employed and one that is self- employed? (19 marks) b) Why do people prefer self-employment rather than being employed, resulting in so many IR35 cases? (6 marks)
Question 3 : a) Discuss the six badges of trade with examples? (15marks) b) Briefly discuss the different VAT schemes available to the VAT registered business? (10 marks)
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Question 4 : On 23 August 2015, Peter made a gift of a house valued at £420,000 to his son, John. This was a wedding gift when John got married. The nil rate band for the tax year 2015/16 is £325,000. Peter Peter died on 20 March 2021 at which time his estate was valued at £880,000. Under the terms of his will, Peter divided his estate equally, before inheritance tax, between his wife and his son, John. Peter had not made any gifts during his lifetime except for the gift of the house to John. Peter did not own a main residence. John John sold the house which he received as a wedding gift from Peter, his father, on 5April 2021.
The following information relates to the property: Net sale proceeds after costs of disposal Cost of new boundary wall around the property (there was previously no boundary wall) Cost of replacing the property’s chimney £ 496,400 (5,200) (2,800) John has taxable income (after deduction of the personal allowance) of £13,950 in 2020/21. The house was never occupied by John. Required: a) Calculate the inheritance tax that will be payable as a result of Peter’s death. (15marks) b) Calculate John’s capital gains tax liability for the tax year2020/21. (10marks)
Guidance Complete all the tasks in order. Consult with your tutor if you are uncertain about any aspect of the assignment.
