FINA 1026 Taxation
PRACTICE Assessed Tutorial 1 (based on 22/23 test)
Adapted for FA23
Time allowed: 45 minutes
This is an open book assessment
Jordan is a manager at Langham Hotel which is part of Mercury plc earning £50,000pa in 2023/24.
Total PAYE deducted from the salary amounted to £18,000.
The following information is available:
Throughout the year Jordan is provided with a motor car for both business and private motoring. The
hybrid electric car has a list price of £26,200 but the employer was able to purchase the car for
£25,000. The electric range of the car is 50 miles. His employer paid for all the running costs of the
car. In addition, employer paid for all the fuel which amounted to £2,750 of which the cost of the
private fuel was £1,650.
Jordan is provided by the employer with a studio apartment which had cost £200,000 and has an
annual value of £2,300. He contributed £100 per month to the cost of the accommodation.
The above accommodation is NOT job related and Jordan pays.
Mercury plc funded a Christmas party in December 2023 for all employees employed at the hotel at a
cost of £80 per person.
On 6th of April 2023 the employer lent Jordan £35,000 at an interest rate of 1% pa. Jordan has not
repaid any of the loan during the tax year 2023/24.
Jordan paid an annual professional subscription of £560 which is relevant to his employment with the
hotel where he works.
Jordan has been renting out his own home throughout 2023/24 at a monthly rental of £1,500pm
payable in advance on 1st day of each month. However, the rent due on 1st April 2023 was not paid
until 10th April 2023. All other payments were made on time.
i. During the year Jordan made qualifying Gift Aid donation to the local hospital of £720 (net).
ii. Jordan received this income during 2023-24 as follows:
Dividend from a UK company £6,000
Bank interest £1,400
Cash award from his employer for being the best
performing manager in the company. £500
You are required to:
Calculate Jordan’s total employment income for 2023/24.
(10 marks)
Calculate income tax payable by Jordan for 2023/24 assuming that the official rate of interest
is 2.25%.
(10 marks)
How would your answer differ if the accommodation was job related?
(1 mark)
If you have excluded any items state clearly the reasons for the tax treatment adopted.
(Total 21 marks)