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Hi All,
On part (b) the solution workin :
Less: employer’s NIC on deemed payment
13.8/113.8 *£20938=(2539)Deemed employee income =£18399
Income tax on deemed employment income
£183998*40% =£7360
NIC’s on deemed employment income
£18339*2% =£368Can you please calrify the steps taken ,and what is meant by deemed income .
Many Thanks.
Trying to explain:
The deemed payment of employer means what he is loosing from his pocket. He is loosing what he is paying to employee and HMRC.
The figure given here, i.e. GBP 20938 includes both i.e employee salary and what is being paid to HMRC, how to separate two figures, because we need employee figure to calculate tax. so remember this formula 13.8/113.8 to split out tax and salary.
hope this explains.
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