Friday 3 December 2004 (afternoon) EXAMINATION. Time allowed 3 hours plus 15 minutes reading time

Transcription

1 NVQ/SVQ Level 3 in Payroll Administration Completing Year-End Procedures (CYE) (2003 standards) Friday 3 December 2004 (afternoon) EXAMINATION Time allowed 3 hours plus 15 minutes reading time Please complete the following information in BLOCK CAPITALS You must give your registration number below If you do not, your paper may not be marked AAT Registration Number Approved Assessment Centre Code Desk number Date Approved Assessment Centre Name Important: This examination paper is in two sections To be successful you will need to show competence in both sections, so you should attempt and aim to complete every task in each section We recommend that you use the 15 minutes reading time to study the examination paper fully and carefully so that you understand what to do for each task However, you may begin to write your answers within the reading time, if you wish You may not use programmable calculators or dictionaries in the examination Do NOT open this paper until instructed to do so by the Supervisor For Assessor s use only SECTION 1 TASK 11 TASK 12 TASK 13 TOTAL SECTION 2 TASK 21 TASK 22 TASK 23 TASK 24 TASK 25 TASK 26 TASK 27 TASK 28 TASK 29 TASK 210 TOTAL AAT 154 Clerkenwell Road, London EC1R 5AD, UK Tel: +44 (0) Fax: +44 (0) SA 4538 CYE

2 Glossary of Terms COMP ET GAYE LEL NIC SMP SAP SPP SSP UEL Contracted Out Money Purchase Earnings Threshold for National Insurance Contributions Give As You Earn, sometimes known as Payroll Giving or Charitable Giving Lower Earnings Limit for National Insurance Contributions National Insurance Contribution Statutory Maternity Pay Statutory Adoption Pay Statutory Paternity Pay Statutory Sick Pay Upper Earnings Limit for National Insurance Contributions 2

3 This page is perforated You may remove it for easy reference This examination paper is in TWO sections Section 1 Section 2 3 Operational Tasks 10 Short Answer Questions You have to show competence in BOTH sections You should therefore attempt and aim to complete EVERY task in EACH section You should spend about 130 minutes on Section 1 and about 50 minutes on Section 2 There is blank space for workings on pages 20, 26 and 27, but you should include all essential workings within your answer where appropriate For abbreviations used, please refer to the glossary on page 2 INTRODUCTION Both sections relate to the company described below You are the Payroll Officer for Star Holdings Ltd Unit 7 Queens Centre Aldershot Hants GU17 0AJ The company has a COMP pension scheme in operation The Tax Office for the company is in Portsmouth and the reference is P60/815 3

4 SECTION 1 OPERATIONAL TASKS You should spend about 130 minutes on this section DATA The output below is an extract of some of the final payroll records for the tax year 2003/2004 Aidan Teirnan Pamela Savoy As-asha Magiet Final Tax Code K L Wk1 374L Date of starting 23/6/ /1/ /10/1989 Date of leaving 8/8/2003 National Insurance No PN426954A WZ271948D SY548976C Gross pay for year including SSP, SMP and previous employment 42, , ,80842 Pay from previous employment Nil 16,37097 Nil Pension Scheme Contributions 2,14376,27537,22713 GAYE for year,90000 Nil Nil Tax deducted for year including tax from previous employment 10, ,37271,78617 Tax in previous employment Earnings at the LEL (where earnings reach or exceed the LEL) This page is perforated You may remove it for easy reference Nil 2,53416 Nil 4, , ,67000 Earnings between the LEL and the ET,61200,15300,25500 Earnings between the ET and the UEL 26, , ,87300 Employee NIC in the year 2,58431,40711,36091 Employer NIC in the year 4,62724,51259,45565 Student Loan payments Nil,26900 Nil SSP paid in the year,21879 Nil Nil SMP paid in the year Nil Nil 1,00000 SMP reclaimed Nil Nil,92000 SAP paid in the year Nil Nil Nil SAP reclaimed Nil Nil Nil SPP paid in the year Nil Nil Nil SPP reclaimed Nil Nil Nil Spare for candidate s use 4

5 Task 11 Using the information given on page 4, prepare the end of year returns form P14 for each employee for the tax year 2003/2004 Use the P14 forms on pages 6, 7 and 8 Note: Star Holdings Ltd is not able to recover any SSP 5

6 004 For help to fill in this form, Please use black ink and write firmly to ensure your entries are clear see Employers Help Book, E10 on all three sheets spaces should be filled from the right-hand side P14 End of Year Summary Inland Revenue office name Employers PAYE reference Your name and address as employer PORTSMOUTH P Insert copy of 2002/2003 P14 form here For employers use Tax Year to 5 April 004 STAR HOLDINGS LTD UNIT 7, QUEENS CENTRE ALDERSHOT HANTS GU17 0AJ Employees private address (if known) Expenses payments and benefits paid to directors and employees: Complete form P11D or P9D if appropriate and provide a copy of the information 15 PAYROLL WAY NEWBURY BERKS Date of birth in figures (if known) Employees details Sex Day Month Year M male, F female P N A M Y Y D D M M Y Y National Insurance number T E I R N A N Surname to your employee by 6 July See Employers Further Guide to PAYE and NICs, CWG2, for more details B R 1 6 A B Postcode A I D A N First two forenames Works/payroll no etc ( Note: LEL = Lower Earnings Limit, ET = Earnings Threshold, UEL = Upper Earnings Limit) National Insurance contributions in this employment Scheme Contracted-out Number (For Contracted-out Money Purchase schemes OR Contracted-out Money Purchase Stakeholder Pension schemes only) Employees contributions due on all earnings above the ET the LEL)(whole s only) From col1a on P11 From col1b on P11 From col1c on P11 From col1d on P11 From col1e on P11 If amount in col1d is a minus amount, enter R here Total of employees and employers contributions Earnings above the ET, up to and including the UEL Earnings above the LEL, up to and including the ET Earnings at the LEL (where earnings are equal to or exceed (whole s only) (whole s only) NIC table letter 1e p 6 p Tax deducted Please detach sheets and make separate bundles of National Insurance and Tax copies before despatch S 1d p 1a 1b 1c S S S Statutory payments in this employment Student Loan Deductions Statutory Adoption Pay (SAP) p in this employment (whole s only) From col1j on P11 1i Statutory Maternity Pay (SMP) Statutory Paternity Pay (SPP) p p Statutory Sick Pay (SSP) p 1h 1g 1f Pay and Income Tax details Enter R in this box if net refund p Pay Day Month Year Date of starting Tax Credits in this employment From col9 on P11 In previous employment(s) Y Y D D Y Y M M if during tax year to 5 April 2004 p Y Y D D Y Y M M Date of leaving In this employment if during tax year to 5 April 2004 Payment in Week 53: if included Total for year For official use in Pay and Tax totals, enter 53, 54 or 56 here p Final tax code (See Employers Further Guide to PAYE and NICs, CWG2) Employees Widows & Orphans/Life Assurance contributions in this employment P14(Manual)( ) National Insurance copy To Inland Revenue BS11/02

7 004 For help to fill in this form, Please use black ink and write firmly to ensure your entries are clear see Employers Help Book, E10 on all three sheets spaces should be filled from the right-hand side P14 End of Year Summary Inland Revenue office name Employers PAYE reference Your name and address as employer PORTSMOUTHP Insert copy of 2002/2003 P14 form here For employers use Tax Year to 5 April 004 STAR HOLDINGS LTD UNIT 7, QUEENS CENTRE ALDERSHOT HANTS GU17 0AJ Employees private address (if known) Expenses payments and benefits paid to directors and employees: Complete form P11D or P9D if appropriate and provide a copy of the information 46 YEAR END STREET READING BERKS Date of birth in figures (if known) Employees details Sex Day Month Year M male, F female WZ D F Y Y D D M M Y Y National Insurance number SAVOY Surname to your employee by 6 July See Employers Further Guide to PAYE and NICs, CWG2, for more details RD7 2AC Postcode P A M E L A First two forenames Works/payroll no etc ( Note: LEL = Lower Earnings Limit, ET = Earnings Threshold, UEL = Upper Earnings Limit) National Insurance contributions in this employment Scheme Contracted-out Number (For Contracted-out Money Purchase schemes OR Contracted-out Money Purchase Stakeholder Pension schemes only) Employees contributions due on all earnings above the ET the LEL)(whole s only) From col1a on P11 From col1b on P11 From col1c on P11 From col1d on P11 From col1e on P11 If amount in col1d is a minus amount, enter R here Total of employees and employers contributions Earnings above the ET, up to and including the UEL Earnings above the LEL, up to and including the ET Earnings at the LEL (where earnings are equal to or exceed (whole s only) (whole s only) NIC table letter 1e p 7 p Tax deducted Please detach sheets and make separate bundles of National Insurance and Tax copies before despatch S 1d p 1a 1b 1c S S S Statutory payments in this employment Student Loan Deductions Statutory Adoption Pay (SAP) p in this employment (whole s only) From col1j on P11 1i Statutory Maternity Pay (SMP) Statutory Paternity Pay (SPP) p p Statutory Sick Pay (SSP) p 1h 1g 1f Pay and Income Tax details Enter R in this box if net refund p Pay Day Month Year Date of starting Tax Credits in this employment From col9 on P11 In previous employment(s) Y Y D D Y Y M M if during tax year to 5 April 2004 p Y Y D D Y Y M M Date of leaving In this employment if during tax year to 5 April 2004 Payment in Week 53: if included Total for year For official use in Pay and Tax totals, enter 53, 54 or 56 here p Final tax code (See Employers Further Guide to PAYE and NICs, CWG2) Employees Widows & Orphans/Life Assurance contributions in this employment P14(Manual)( ) National Insurance copy To Inland Revenue BS11/02

8 004 For help to fill in this form, Please use black ink and write firmly to ensure your entries are clear see Employers Help Book, E10 on all three sheets spaces should be filled from the right-hand side P14 End of Year Summary Inland Revenue office name Employers PAYE reference Your name and address as employer PORTSMOUTH P Insert copy of 2002/2003 P14 form here For employers use Tax Year to 5 April 004 STAR HOLDINGS LTD UNIT 7, QUEENS CENTRE ALDERSHOT HANTS GU17 0AJ Employees private address (if known) Expenses payments and benefits paid to directors and employees: Complete form P11D or P9D if appropriate and provide a copy of the information 27 PROCEDURES PARK ANDOVER HANTS Date of birth in figures (if known) Employees details Sex Day Month Year M male, F female S Y C F Y Y D D M M Y Y National Insurance number MA G I E T Surname to your employee by 6 July See Employers Further Guide to PAYE and NICs, CWG2, for more details GU8 4AD Postcode AS -AS HA First two forenames Works/payroll no etc ( Note: LEL = Lower Earnings Limit, ET = Earnings Threshold, UEL = Upper Earnings Limit) National Insurance contributions in this employment Scheme Contracted-out Number (For Contracted-out Money Purchase schemes OR Contracted-out Money Purchase Stakeholder Pension schemes only) Employees contributions due on all earnings above the ET the LEL)(whole s only) From col1a on P11 From col1b on P11 From col1c on P11 From col1d on P11 From col1e on P11 If amount in col1d is a minus amount, enter R here Total of employees and employers contributions Earnings above the ET, up to and including the UEL Earnings above the LEL, up to and including the ET Earnings at the LEL (where earnings are equal to or exceed (whole s only) (whole s only) NIC table letter 1e p 8 p Tax deducted Please detach sheets and make separate bundles of National Insurance and Tax copies before despatch S 1d p 1a 1b 1c S S S Statutory payments in this employment Student Loan Deductions Statutory Adoption Pay (SAP) p in this employment (whole s only) From col1j on P11 1i Statutory Maternity Pay (SMP) Statutory Paternity Pay (SPP) p p Statutory Sick Pay (SSP) p 1h 1g 1f Pay and Income Tax details Enter R in this box if net refund p Pay Day Month Year Date of starting Tax Credits in this employment From col9 on P11 In previous employment(s) Y Y D D Y Y M M if during tax year to 5 April 2004 p Y Y D D Y Y M M Date of leaving In this employment if during tax year to 5 April 2004 Payment in Week 53: if included Total for year For official use in Pay and Tax totals, enter 53, 54 or 56 here p Final tax code (See Employers Further Guide to PAYE and NICs, CWG2) Employees Widows & Orphans/Life Assurance contributions in this employment P14(Manual)( ) National Insurance copy To Inland Revenue BS11/02

9 Task 12 Using the information given on page 4, complete the details in the summary section of the extract of Form P35 for the tax year 2003/2004 Use the form P35 on page 10 Note: Star Holdings Ltd cannot claim back any of its SSP 9

10 Insert copy of form 2002/2003 P35 here 20,

11 This page is perforated You may remove it for easy reference DATA Dominick D Souza is a salesman for Star Holdings Ltd During the year 2003/2004 he enjoyed the following benefits in addition to his salary and had other transactions that now need to be taken into account 1 He used a company car on both company business and for personal use The details are as follows: The car was a Vauxhall Vectra 27 V6 The petrol engine has a capacity of 2695 cc It cost 21,995 new when first registered on 6 March 2003, and was supplied to Dominick on that day Dominick paid the full cost of 500 to upgrade the stereo system The CO 2 rating for the car is The company has a Private Medical Plan with individually calculated premiums The total paid by the company for Dominick during the tax year was 1, Dominick used the company credit card to pay for the stereo upgrade of 500 This took place during the tax year and he repaid the amount to the company 11

12 THIS PAGE IS INTENTIONALLY BLANK 12

13 Task 13 (a) Calculate the benefit in kind values of the relevant items on page 11 using the P11D working sheets on pages (b) Complete Dominick D Souza s P11D on pages

14 P11D Working Sheet 2 Car and Car fuel benefit This form has been updated to conform to the method of calculating car benefit in the Income Tax (Earnings and Pensions) Act 2003 Note to employer You do not have to use this form but you may find it a useful way to calculate the cash equivalent for each car made available to a director or an employee who earned at a rate of 8,500 a year or more during the year (that is 6 April 2003 to 5 April 2004) A separate form is needed for each car provided to the director or employee during Read the P11D Guide before you complete this form It refers to paragraphs in booklet 480(2004) You are advised to keep a copy of each completed working sheet as it could help you to deal with enquiries You do not have to give a copy of the completed working sheet to the director or employee, or to the Inland Revenue office But you must fill in forms P11D and P11D(b) Return of Class 1A National Insurance contributions whether or not you use this form to calculate car and car fuel benefits The term employee is used to cover both directors and employees throughout the rest of this form Employer s details Employer s name Star Holdings Ltd Employer s PAYE reference P60/815 Employee s details Employee s name Dominick D Souza Works number or department National Insurance number The car Make of car available to employee Vauxhall Model Vectra 27 V6 Date the car was first registered 06 / 03 / 2003 Was this the only car made available to the employee Yes No If No please make sure that working sheets are completed for each car made available to the employee in If more than one working sheet 2 is completed for this employee, enter the number of sheets here 1 List price of the car Complete box A as follows enter the list price of the car as published by its manufacturer, importer or distributor if the car had no list price when it was first registered you need to enter the notional price That is, the price which might reasonably be expected to be its list price on that date if the car s manufacturer, importer or distributor had published a list price for an equivalent car for a single retail sale in the UK if the car is a classic car, enter the price that the car might reasonably be expected to fetch if you sold it on the open market on 5 April 2004 If the car was unavailable to the employee on 5 April 2004 then use the last day in the tax year that it was available to the employee For this purpose, assume that all the qualifying accessories available on the car are included in the sale A classic car is one which is at least 15 years old on 5 April 2004 has a market value of at least 15,000, and has a market value which is higher than the original list or notional price (including accessories) Price of the car including standard accessories A List 2 Accessories Price of all accessories see P11D Guide and paragraphs of booklet 480(2004) B C A + B 3 Capital contributions Capital contributions made by the employee towards the cost of the car or the accessories max 5,000 D 4 The price used to calculate the car benefit charge for This box is subject to a maximum of 80,000 E C minus D P11D WS2 (2004) 1 BS11/03

15 5 Calculating the appropriate percentage The appropriate percentage depends on when the car was first registered, the type of fuel used and whether it has an approved CO 2 emissions figure Approved CO 2 emissions figure, if the car has one unrounded, for example 188 Enter the key letter (B,C,D,E,H,L or P) for the car s fuel or power type from the table below F g/km Key letter P D L E H B C Fuel or power type description Petrol Diesel not approved to Euro IV emissions standard Diesel approved to Euro IV emissions standard Electric Only Hybrid electric (combination of petrol engine and electric motor) Gas only or bi-fuel car with approved CO 2 emissions figure for Gas when first registered Conversion and all other bi-fuel cars with approved CO 2 emissions figure for Petrol only when first registered Next step For cars registered on or after 1 January 1998 with an approved CO 2 emissions figure, Go to section 5a For cars registered on or after 1 January 1998 without an approved CO 2 emissions figure, Go to section 5b For cars registered before 1 January 1998, Go to section 5c 5a Cars registered on or after 1 January 1998 with an approved CO 2 emissions figure Note: Fuel type E (electric) cars do not have an approved CO 2 emissions figure Go straight to section 5b Approved CO 2 emissions figure in box F, rounded down to the next lowest 5g/km, for example 185 Stage 1 - using the ready reckoner below, work out from the figure in box G the percentage to enter in box H use column 1 for fuel types B,C,H,L and P use column 2 for fuel type D G H g/km % Ready reckoner of car benefit percentages CO 2 emissions (g/km) Column 1 (%) Column 2 (%) CO 2 emissions (g/km) Column 1 (%) Column 2 (%) CO 2 emissions (g/km) Column 1 (%) Column 2 (%) 155* * *These are the minimum and maximum CO 2 values for which different percentages apply Use these values if the figure at box G is less than the minimum or greater than the maximum Stage 2 - calculate standard discounts for alternative fuel/power types fuel type letters H,B and C only fuel type H - insert 2% in box J fuel types B or C - insert 1% in box J Stage 3 - calculate any additional discount fuel type letters H and B only if the figure in box F is more than 135, insert 0% in box L if the figure in box F is 135 or less, then 155 minus box F K J % box K divided by 20, rounded down to the next whole number Total discounts from stages 2 and 3 L % M J + L % Appropriate percentage Go straight to section 6 - do not complete sections 5b or 5c N H minus M % 2

16 5b Cars registered on or after 1 January 1998 without an approved CO 2 emissions figure Stage 1 - using the table below, work out the percentage to enter in box H use column 1 for fuel types B,C,H,L and P use column 2 for fuel type D for fuel type E, insert 15% H % Engine size of car (cc) over 2000 all rotary engines Column 1 % Column 2 % Stage 2 - calculate standard discounts for alternative fuel/power types fuel type letters H,B,C and E only fuel type E - insert 6% in box J fuel type H - insert 2% in box J J fuel types B or C - insert 1% in box J % Appropriate percentage Go straight to section 6 - do not complete sections 5c N H minus J % 5c All cars registered before 1 January 1998 Enter the engine size, then work out the percentage to enter in box N Engine size of car (cc) Percentage 15 cc over 2000 all rotary engines Appropriate percentage N % 6 Calculate the car benefit for a full year Ignore any decimals when completing box P P E x N 7 Make any deductions for days the car was unavailable If the car was available to the employee for the whole of the tax year, put the figure in box P into box S If not, state the period for which the car was available from / / to / / Total days for which the car was unavailable see P11D Guide and booklet 480(2004) Q Deduction for unavailability round up to next whole number R (P x Q)/366 Car benefit for the period the car was available S P minus R 3

17 8 Make any deductions for payments for private use Enter any required payments made for private use of the car in the year T Car benefit charge for for this car Round down box U to the next whole number and enter the figure in box 116 in section F of form P11D If the employee had more than one car available in the year, add together all the figures at box U on each working sheet, then transfer the total to box 116 in section F of form P11D U S minus T 9 Calculate the car fuel benefit charge if appropriate - see P11D Guide Car fuel benefit charge for the whole of this tax year V 14,400 x N Calculate any required deductions Days the car was unavailable from section 7 Q If the provision of fuel was withdrawn and not reinstated later in the year, enter the date and complete box W, otherwise, go to box X Date the provision of fuel was withdrawn if applicable / / Additional days after fuel was withdrawn not already counted in box Q do not include the same day in both box Q and box W W Total days for which no car fuel benefit charge applies X Q + W Deduction round up to next whole number Y (V x X)/366 Car fuel benefit charge for for this car Enter the figure at box Z in box 117 in section F of the form P11D If the employee had more than one car available in the year, add together all the figures at box Z on each working sheet, then transfer the total to box 117 in section F of form P11D Z V minus Y 4

18 P11D EXPENSES AND BENEFITS Note to employer Complete this return for a director, or an employee who earned at a rate of 8,500 a year or more during the year 6 April 2003 to 5 April 2004 Do not include expenses and benefits covered by a dispensation or PAYE settlement agreement Read the P11D Guide and Booklet 480, Chapter 24, before you complete the form You must give a copy of this information to the director or employee by 6 July 2004 The term employee is used to cover both directors and employees throughout the rest of this form Send the completed P11D and form P11D(b) to the Inland Revenue office by 6 July 2004 Employer s details Employer s name Star Holdings Ltd PAYE tax reference P60/815 Note to employee Your employer has filled in this form Keep it in a safe place as you may not be able to get a duplicate You will need it for your tax records and to complete your Tax Return if you get one Your tax code may need to be adjusted to take account of the information given on this P11D The box numbers on this P11D have the same numbering as the Employment Pages of the Tax Return, for example, 112 Include the total figures in the corresponding box on the Tax Return, unless you think some other figure is more appropriate Employee s details Employee s name Dominick D Souza Works number /department If a director tick here National Insurance number Employers pay Class 1A National Insurance contributions on most benefits These are shown in boxes which are brown and have a 1A indicator Amount made good or A Assets transferred (cars, property, goods or other assets) Cost/ Market value from which tax deducted Cash equivalent B Description of asset = 112 1A Payments made on behalf of employee Description of payment 112 P11D(2004) BS 11/03 C D E F Tax on notional payments not borne by employee within 30 days of receipt of each notional payment Vouchers or credit cards Amount made good or Gross amount from which tax deducted 112 Value of vouchers and payments made using credit cards or tokens = 113 Living accommodation Cash equivalent Cash equivalent of accommodation provided for employee, or his/ her family or household 114 1A Date first registered 06 / 03 / 03 / / Approved CO2 emissions figure for cars registered on or after 1 January 1998 Tick box See P11D Guide for See P11D Guide for if the car does not have an approved CO2 figure g/km details of cars that have g/km details of cars that have no approved C02 figure no approved C02 figure Engine size cc cc Type of fuel or power used Please use the key letter shown in the P11D Guide (2004) Dates car was available From Only enter a from or to date if the car was first made / / to / / From / / to / / available and/or ceased to be available in List price of car Including car and standard accessories only: if there is no list price, or if it is a classic car, employers see booklet 480; employees see leaflet IR172 Accessories All non-standard accessories, see P11D Guide Cash equivalent Mileage allowance and passenger payments Taxable amount Amount of car and mileage allowances paid for employee s own vehicle, and passenger payments, in excess of maximum exempt amounts (See P11D Guide for exempt rates) 115 Cars and car fuel If more than two cars were made available, either at the same time or in succession, please give details on a separate sheet Car 1 Car 2 Make and Model Capital contributions (maximum 5,000) the employee made towards the cost of car or accessories Amount paid by employee for private use of the car Cash equivalent of each car Total cash equivalent of all cars available in Cash equivalent of fuel for each car Vauxhall Vectra 27 V 6 Date free fuel was withdrawn (applies to all cars) Tick if reinstated in year (see P11D Guide) Total cash equivalent of fuel for all cars available in / / 116 1A 117 1A

19 G H Vans Cash equivalent of all vans made available for private use 118 1A Interest-free and low interest loans If the total amount outstanding on all loans does not exceed 5,000 at any time in the year, there is no need for details in this section Loan 1 Loan 2 Number of joint borrowers (if applicable) Amount outstanding at 5 April 2003 or at date loan was made if later Amount outstanding at 5 April 2004 or at date loan was discharged if earlier Maximum amount outstanding at any time in the year Total amount of interest paid by the borrower in enter NIL if none was paid Date loan was made in if applicable / / / / Date loan was discharged in if applicable / / / / Cash equivalent of loans after deducting any interest paid by the borrower 119 1A 119 1A I J K L M Private medical treatment or insurance Cost to you Cash equivalent Private medical treatment or insurance = 121 1A Qualifying relocation expenses payments and benefits Non-qualifying benefits and expenses go in N and O below Excess over 8,000 of all qualifying relocation expenses payments and benefits for each move 122 1A Amount made good or Services supplied Cost to you from which tax deducted Cash equivalent Services supplied to the employee = 122 1A Assets placed at the employee s disposal Annual value plus Amount made good or expenses incurred from which tax deducted Cash equivalent Description of asset = 122 1A Shares Tick the box if during the year there have been share-related benefits for the employee Amount made good or from which tax deducted N Other items (including subscriptions and professional fees) Description of other items Cost to you Amount made good or from which tax deducted = 122 Cash equivalent 1A Description of other items = 122 Tax paid Income tax paid but not deducted from director s remuneration 122 O Expenses payments made to, or on behalf of, the employee Amount made good or Cost to you from which tax deducted Taxable payment Travelling and subsistence payments (except mileage allowance payments for employee s own car - see box E) = 123 Entertainment (trading organisations read P11D Guide and then enter a tick or a cross as appropriate here) = 123 General expenses allowance for business travel = 123 Payments for use of home telephone = 123 Non-qualifying relocation expenses (those not shown in sections J or N) = 123 Description of other expenses = 123

20 You may use this page for your workings 20

21 SECTION 2 SHORT ANSWER QUESTIONS You should spend about 50 minutes on this Section Write in the space provided OR circle the correct answer Do not show your choice in any other way Aim to answer all the questions on pages Task 21 One of the company s sales staff decides to borrow money from the company rather than have a company car The company lends him 10,000 interest free in April 2003 and he agrees to repay the loan at 275 every month starting in April 2003 The official rate of interest for 2003/2004 was 5% and the Class 1A NIC rate was 128% Note: You may wish to refer to the P11D at Section H to calculate your answer (a) What is the benefit in kind value to be reported on the 2003/2004 P11D? (b) What is the Class 1A amount to be paid? (c) By what date must the Class 1A NIC be paid to the Collector of Taxes? 19 July 19 April 19 May PLEASE TURN OVER FOR TASK 22 21

22 Task 22 The Chief Accountant decides to take her staff out to lunch to thank them for completing all the company accounts on time It costs 250 for 10 staff and the company pays the bill (a) What are the Tax and NI implications for the staff? (b) What reporting implications are there for the company? (c) By what date must the tax and NIC implications be reported to the Inland Revenue? Task 23 An employee is presented with a gift for her 20 years of continuous service with the company The company pays 300 for a gold bracelet (a) Is the value of the gift reportable to the Inland Revenue? Yes No (b) Explain your answer 22

23 Task 24 The company has a strict Expenses Reimbursement policy Employees have to submit detailed claim forms and show original receipts before they are repaid Despite this, the company has been advised to obtain an Inland Revenue dispensation for expenses (a) What is a dispensation? (b) What happens if a dispensation is not obtained? (c) What extra precautions must be taken if an expenses advance is paid out to an employee? 23

24 Task 25 One of the Directors complains that a P11D Return of Expenses and Benefits has been completed and submitted for him even though the total value of his fees was only 3,500 and of his benefits only 1,000 He wants you to correct this mistake (a) Has a mistake been made? Yes No (b) Explain your answer Task 26 A company offers free travel by company vehicle to all its employees to and from work Is this a taxable benefit? Yes No Task 27 State THREE steps you would follow in calculating the benefit in kind value of a company asset purchased by an employee during the tax year

25 Task 28 You are calculating the 8,500 limit for the P11D/P9D process Are the values of any dispensations or PAYE Settlement Agreements deducted or not deducted from the total of pay, expenses and other benefits? (a) Deducted Not deducted (b) What is the purpose of the 8,500 limit? Task 29 An employee working at the main office is asked to work at another office The new office is 50 miles away from the main building Should her home to work travelling expenses be reported on P11D: (a) if the assignment lasted for 22 months?yes (b) if the assignment lasted for 26 months?yes No No Task 210 Is the employer liable for Class 1A NICs on the following items? (a) benefits reported on P9D Yes No (b) the company car benefit in kind value Yes No (c) items included in a PAYE Settlement Agreement Yes No (d) items covered by a dispensation Yes No 25

26 You may use this page for your workings 26

27 You may use this page for your workings 27

28 NVQ/SVQ qualification codes Payroll Administration (2003 standards) 100/2939/4/G75M23 Unit number (CYE) Y/101/8093 Association of Accounting Technicians 154 Clerkenwell Road, London EC1R 5AD, UK Tel: +44 (0) Fax: +44 (0)