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Hello,
Sanjay is employed. As well as his annual salary he is also paid a bonus in April each year.
The amount of the bonus is based upon his performance to the end of the previous calendar year.On 6 April 2018 he received a bonus of £2800 in respect of the year 31 December 2017 and on 3 April 2019 he received a bonus £3300 in respect of the year to 31 December 2018.
What amount of bonus is taxed in the year 2018/19?
A 2800
B 3300
C 2485
D 61001. The answer is £6100(2800+3300)
– Why 2800 has been added? As per OT notes, the date received is taken as the earliest of the date when the employee became entitled to the payment or the date when it was actually received by the employee.– The £2800 was received on 6 April 2018 but the employee was entitled for the bonus on 31 Dec 2017 which is in the 2017/18 tax year.
2. Please locate where I am getting things wrong?
Thanks.
No, the employee did not become entitled to the bonus on 31 December, that was simply the end of the accounting period for which the bonus was earned. If the question wants you to utilise “the date when the employee became entitled to the payment” then that wording will be used.
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