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In the BPP study text there is this small paragraph in relation to additional benefit charge on taxable benefits: Thus with an official rate of 3.25%, the total benefit for accommodation costing £95,000 and with an annual value of £2,000 would be £2000+£(95,000-75,000)x3.25% = £2,650.
The annual value is not added in any other calculation in other examples. Does it have to be added or not?
Thank you.
Pulet
I have watched the relevant lecture again. This is my conclusion:
If trade starts on 1.01.2014 and accounts are prepared:
to the 30.04.2015
y/e 30.04.2016
y/e 30.04.2017
1st tax year: 2013/2014
Period of account Ends Tax year Length
1.1.14-30.04.15 2015/2016 16 months
1.5.15-30.04.16 2016/2017
1.5.16-30.04.17 2017/2018
Tax year Basis period
13/14 1.01.14-05.04.14 (Actual)
14/15 (Second tax year): Is there a period of account, which ends in the 2nd tax year? No, there isn’t. Therefore, basis period 06.04.14-05.04.15 (Actual)
15/16 (Third tax year): Basis period: 12 months to the period of account ending in the third tax year.
01.05.14-30.04.15
Thank you very much for your prompt response.
Yes, I am referring to income tax assessments.
I think that I did not formulate the first question properly. I have difficulties to determine the length of the period of account/accounting period in order to establish the basis period for the second tax year. My understanding is as follows:
If trade starts the 1 January 2014 and accounts are prepared to the 30 April, then:
Period of account/accounting period Tax year
Year 1 1.1.14-30.04.14 2013/2014
Year 2 1.5.14-30.4.15 2014/2015
Year 3 1.5.15-30.4.16 2015/2016
Second tax year: Is there a period of account which ends in the 2nd tax year? Yes (1.5.14-30.4.15).
How long is that period? 1.5.14-30.3.15 therefore, it is 11 months long < 12 months, so the basis period for year 2 is 1.1.14-31.12.14 (first 12 months of trade).Is this reasoning correct?
Thank you.
Regards
Pulet
