Acca F6 Past Exam Papers

Answers

Fundamentals Level – Skills Module, Paper F6 (UK) Taxation (United Kingdom) 1 (a) (i) Vanessa Serve – Income tax computation 2006–07 Trading profit Capital allowances (10,400 x 25% = 2,600 x 14,000/20,000) Interest from investment account at NSI Bank Personal allowance Taxable income Income tax 2,150 at 10% 37,550 at 22% 6,945 (46,645 – 2,150 – 37,550) at 40% ––––––– 46,645 ––––––– Income tax payable

December 2007 Answers

£ 52,400 (1,820) ––––––– 50,580 1,100 ––––––– 51,680 (5,035) ––––––– 46,645 ––––––– 215 8,261 2,778 ––––––– 11,254 –––––––

(1) Interest from investment accounts at the National Savings & Investments Bank is received gross. (2) The personal pension contribution results in Vanessa’s basic rate tax band being extended to £37,550 (31,150 + 6,400). Serene Volley – Income tax computation 2006–07 £ Employment income Salary Pension contributions (26,400 x 5%) Car benefit Interest from savings certificate Personal allowance Taxable income Income tax 2,150 at 10% 21,995 (24,145 – 2,150) at 22% ––––––– 24,145 ––––––– Income tax liability Tax suffered at source – PAYE Income tax payable (1) The relevant percentage for the car benefit is 25% (15% + 10% (190 – 140 = 50/5)). (2) The motor car was available throughout 2006–07 so the benefit is £4,100 (16,400 x 25%). (3) Interest on savings certificates from the National Savings & Investments Bank is exempt from income tax. (ii) Vanessa Serve (1) Class 2 NIC for 2006–07 will be £109 (52 x 2·10). (2) Class 4 NIC for 2006–07 will be £2,451 ((33,540 – 5,035 = 28,505 at 8%) + (50,580 – 33,540 = 17,040 at 1%)). Serene Volley (1) Class 1 NIC for 2006–07 will be £2,350 (26,400 – 5,035 = 21,365 at 11%). (2) Pension contributions are ignored, and benefits are not subject to employee Class 1 NIC. (iii) Vanessa Serve (1) The balancing payment for 2006–07 due on 31 January 2008 is £5,000 (11,254 + 2,451 – 8,705). (2) The payments on account for 2007–08 will be £6,852 (11,254 + 2,451 = 13,705 x 50%). These...