PAYE Chapters 22-xx

Question 1

What are ‘readily convertible assets’ and what applied to them?

Answer 1

PAYE.
They are assets which are trade-able on a recognized exchange or where trading arrangements exist (i.e your ER has already set up sale of an asset they have given you).

Question 2

If a private expense is reimbursed to an employee…

Answer 2

PAYE will be due

Question 3

What other ‘assets’ are subject to PAYE?

Answer 3

Those which can be ‘surrendered’ for cash i.e premium bonds (literally can be swapped for cash)

Question 4

What is normally the rule for deductions from EE’s pay through PAYE and what is the exception?

Answer 4

Normally cannot exceed 50% but in the case of readily convertible assets it can reduce it to nil.

Question 5

What can be done re income not taxed at source with PAYE codes?

Answer 5

This can be taken into account and deducted from the PA when coming to the code. BUT must remember the allowances and that div income isnt taxed at the same rates. Do div x div rate x (100/40/20/45) TEST THE NUMBER TO MAKE SURE IS RIGHT

Question 6

What level of underpayment of PAYE is not required to be collected via SA?

Answer 6

3000

Question 7

What happens with tax underpayments in tax codes?

Answer 7

Restrict personal allowances by such an amount that it will be collected

Question 8

What do we do with L codes?

Answer 8

Remove last digit and put L after it instead

Question 9

What do we do with K codes?

Answer 9

remove last digit, minus 1 and then put a K in front of it

Question 10

What else do you need to think about when doing the tax code calc?

Answer 10

Any tax reducers e.g VCT, EIS, SEIS etc

Question 11

What code if getting marriage allowance?

Answer 11

M