Question 5 Flashcards
What is the mileage rate for IT?
45p up to 10k miles then 25p onwards for a car
What is the mileage rate for NIC?
45p for all miles on a car
Are employer contributions into personal/occupational pensions exempt?
Yes
What is the cap on gross pension contribution by employees?
Higher of £3,600 or relevant earnings (employment income & trading income)
How is tax relief given from an ee putting money into an occupational pension?
Deduct from employment income
How is tax relief given from an ee putting money into a personal pension?
Gross up (*100/80), Extend bands, deduct from adjusted net income.
What is adjusted net income?
Net income - Gross personal pension contributions - gross gift aid
What does Adjusted net income effect?
It affects child benefit charge and when you start tapering the personal allowance.
How much is the pension annual allowance?
£60,000 + previous 3 years bfwd
Up to how much is exempt for an employee’s relocation?
£8,000 relocation allowance
Purchase of an employer asset?
Greater of MV at first use or MV less tax paid from private use
What is the maximum that you can contribute to a work car?
£5000
What amount of trade income is exempt?
Trading allowance < £1000
How to calculate DTR ?
Do a calculation with all the WW income then do again with just UK Income, the difference between the both is the UK tax on foreign income, which can be used to do DTR.
DTR is the lower of?
UK tax on overseas income/gain, and
Foreign tax suffered.
How to offset trading losses against gains?
Firstly, offset against all possible total income, then if remaining you can offset against gains for an individual.
What can you do with a trading loss as an individual?
Offset against PY total income and/or CY total income and/or carry forward.
How does early loss relief work?
If you make a loss in the first four tax years you can offset against total income in previous 3 years FIFO
How does terminal loss relief work
Loss in final 12 months of trading offset against trading profits in previous 3 years LIFO from same trade.
What profits can carry forward losses be used on?
Trading profits
What is the max loss that can be used against non-trade income?
Higher of:
£50k, &
25% of total income
What pre-trade expenses can be deducted?
If incurred <7years before start of trade
When do you use the cash basis when calculating property income?
If it is less than £150,000
What to do with mortgage interest?
You get a 20% relief against tax payable