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Judith works for Sabre LTD for an annual salary of £18000. On 30 Sept 2018, she received a bonus of £4000 in respect of Sabre LTD trading results for the y/e 31 March 2018. She expects to receive a bonus of £4800 on 30 Sept 2019 in respect of Sabre LTD results for the y/e 31 March 2019.Judith also received £500 from a customer on 1 December 2018 as a gratuity for good service.
What is Judith employment income for taxyear 2018/19?
I chose 23,300 by using the earliest the amount was received or it entitlement
But the answer was 22,500
Please can you explain how it was derived as I have studied the OT lecture notes and watch the video
You are correct in saying that the date received is taken as the earlier of the date when the employee became entitled to the payment or the date that it was actually received.
The date of entitlement is NOT however given in this question it merely states “she expects to receive a bonus” – where the date of entitlement is required that wording will be given in the question.
When an employee might or might not expect to receive a payment is irrelevant.
This is the problem with some objective questions where it is the wording used within them that is the issue.
would the £500 from a customer be exempt if it was less than £250
Cash payments will be taxable