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car benefit calculation – F6 UK Sep 15 Sample Section B Q5

Forums › ACCA Forums › ACCA TX Taxation Forums › car benefit calculation – F6 UK Sep 15 Sample Section B Q5

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  • November 25, 2017 at 11:14 pm #418001
    ellephoebe
    Member
    • Topics: 10
    • Replies: 11
    • ☆

    Hi All,

    Please could you help me understand the car benefit calculation?

    Q. Throughout the tax year 2014–15, Rope plc provided Delilah with a petrol powered motor car which has a list price of £67,200, and an official CO2 emission rate of 207 grams per kilometre.

    A. The relevant percentage for the car benefit is 34% (12% + 22% (205 – 95 = 110/5)).

    I understand that up to 95g/km = 12% (given in the supplementary tax rates area).
    But I do not understand why 205 is used instead of 207 and why we divide the 110 by 5?

    Thank you,

    November 27, 2017 at 11:47 am #418404
    Chris
    Member
    • Topics: 7
    • Replies: 591
    • ☆☆☆☆

    The tax percentage increases by 1% for every extra 5g/km over 95g/km. This is rounded down to the nearest percentage point. Therefore we use 205 instead of 207, and it’s divided by 5 to get the number of extra percentage points to add on.

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