Evaluate the two alternative structures based on the key factors given below and prepare a report to Sam.

TAXATION FUNDAMENTALS

COURSEWORK 2018/ 2019

Taxation Fundamentals BAF–5–TAF(Semester 1: Full-time)

MODULE LEADER: Theivendran Suresh

BAAF 2^nd Year

Taxation (UK)

Taxation Fundamentals Coursework

SUBMISSION

This report has a 40% weighting in calculating your overall module mark. It must be electronically produced in a SINGLE WORD DOCUMENT.

WORD PROCESSING SKILLS

Part of the purpose of the coursework in Taxation Fundamentals is to assess the ‘soft skills’ of students in terms of word processing. Therefore, we require you to submit a ‘Professional’ looking document which can earn up to 15% of the marks available for the coursework. The marks will be assessed with reference to matters such as:

Use of spellcheck
Consistent and appropriate font size and style
Correct pagination
Page numbering
Spacing
Use of tables
Word count
Presentation of numbers
General format and content issues

It is recommended that the following should be included in your document:

Title/cover (including the name of course, the name of the module and coursework, your date of birth, your name and student number, the date and the word-count)
Page of contents
Main body of report (Scenario one, two and three)
Bibliography (using Harvard style of referencing)
Appendices as required

GUIDANCE ON REFERENCING

(Supplied by Academic Misconduct Officer)

The attention of every student is drawn to the warning in the course guide on late submission of coursework, mitigating circumstances and plagiarism. Correct referencing is an academic skill that you will be assessed on.

Correct referencing demonstrates that you have read appropriately on the subject, shows that you are acknowledging the sources you have used (that you are not trying to cheat) and provide information on useful sources of information to your reader.

Doing it correctly demonstrates professionalism. Doing it incorrectly will lead to reduced marks and possibly to disciplinary action, which includes the possibility of having your studies terminated.

Further help is available on all academic matters from the ‘Academic Assistant’ at http://www.blc.lsbu.ac.uk/aa/aa/

Taxation Fundamentals Coursework

Display your date of birth prominently on the cover page to your assignment.

BACKGROUND

You have been contacted by Jeff Ross & Sam James who are your family friends. They are aware that you are studying taxation at London South Bank University, and they would like you to help them to clarify some tax issues.

You are required to deal with both PARTS (Part 1& Part 2)

Each of the 2 Parts will carry equal marks.

PART 1

Mr Jeff Ross:

Is domiciled and resident in UK.
Has recently received a major promotion at work and he will now be the Financial Controller for his employer, Typo plc, a listed company.
From 6 April 2017 Jeff will be receiving a greatly enhanced salary (see note 1) and employee benefits (paid by his employer) in his new position and now would like to know how much tax he will have to pay in the current tax year.
In addition to his salary, Jeff was paid a bonus of £12,000 on 12^th May 2017. He had become entitled to this bonus on 22 March 2017.
Jeff also has other income as detailed below.
Entitled to the basic personal allowance and he contributed 6% of his monthly gross salary into Typo’s HMRC registered occupational pension scheme.

Jeff also makes charitable donations (which qualify as gift aid) to the RSPCA. The net value of these donations is equal to 2% of her gross salary.

The proposed package of benefits is as follows:

Jeff will also have use of a company accommodation (see note 2)
Car – his own choice up to the value of £25,000 (see note 3)
Unlimited fuel for car
Access to a personal computer for home and work use (see note 4)

Other Income

In the tax year 2017/2018 Jeff also received interest on his building society account equal to 5% of his gross salary.

In addition he has a portfolio of investments and in the tax year 2017/2018 he received dividend income equal to 10% of his gross salary.

Note 1

Jeff’s annual salary is £96,072

Note 2

Jeff moved into the company accommodation in London on 6 May 2016. The property was purchased by his employer in 2012 for £180,000 and the company had spent £31,000 in August 2013 on improvements to the property.

The property currently had a market value of £235,000 and has a rateable value of £11,600. The company provided all the furniture at a cost of £45,000, Jeff is required to pay all the utility bills for the property.

Note 3

Choose a car (your personal preference) from the web for Jeff’s new vehicle. Give full details of make, model, list price, type of engine and CO2 emission. Print off the details of the car from the website you used.

Note 4

On 6 July 2016 the company lent Jeff a computer costing £5,000 for use when commuting and in his home which he used for both business and private purposes.

REQUIRED:

Write a report with detailed explanation of Jeff Ross’s income tax payable and his NICs for 2017/2018.

You must clearly show all the relevant calculations in detail, added as supporting documents for your report. Your calculation should be set out in a way that Jeff (not a tax expert) can easily understand.

Remember! – Mr Jeff does not have much knowledge of Taxation issues!

Professional marks will be awarded for

the overall presentation of the report,
the provision of relevant advice and
the effectiveness with which information is communicated.

Suggested word length for this report = 700 words. (Excluding calculations!)

PART 2

Sam James who is domiciled & resident in the UK, married with two children. A meeting with Sam for next week has been scheduled with you, the tax senior.

The following information has been obtained from a telephone conversation with Sam.

Sam is very much interested in running her own business. She has a credible business plan but not sure on the choice of business vehicle.

Her concerns are whether to;

Take over an existing business or
Start a new business (as an unincorporated entity or as a company.)

REQUIRED

Evaluate the two alternative structures based on the key factors given below and prepare a report to Sam.

Key factors:

Commercial issues
Legal issues
Tax implications
First years of trading
Final years of trading
Profit extraction
Change of accounting date
Other matters

Professional marks will be awarded for

the overall presentation of the report,
the provision of relevant advice and
the effectiveness with which information is communicated.

Suggested word length = 700 words.

Marking guide for Taxation Fundamentals Coursework

BA (Hons) Accounting and Finance (BAAF)

Student Name: Student No:

	Marks available	Marks obtained	Comments
Part 1 Supporting document (Calculations)	(25)
Salary Bonus Car benefit Fuel benefit RV Expensive accommodation Furniture P.C. BSI Dividends Charitable donation Personal allowance NIC’s Tax calculation	1 1 2 2 2 1 1 1 2 2 2 3 1 4
Report	(25)
Salary Bonus Car benefit Fuel benefit RV Expensive accommodation Furniture P.C. BSI Dividends Charitable donation Personal allowance NIC’s Tax calculation	1 1 2 2 2 1 1 1 2 2 2 3 1 4
Part 2	(25)
Existing business · commercial issues · legal issues · tax implications · extraction of profits · change of accounting date · the final years of business New business · as an Unincorporated trader or a Company · commercial issues · legal issues · tax implications · the first years of trading Other matters – relevant /valid arguments	12 12 1
Presentation	(25)
Word Processing Skills	15
Bibliography and referenced citations in text and cross referencing	5
General presentation and English.	5
Other Overall Comments