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My question goes beyond exam purposes as I am facing this issue at work, and the syllabus does not cover that side of the lease agreement. Also, my company is the lessee not the lessor.
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
