Level 3 Certificate in Payroll Administration (QCF) Completing year-end procedures (CYE)

Transcription

1 Payroll Qualification Question paper Level 3 Certificate in Payroll Administration (QCF) Completing year-end procedures (CYE) Friday 4 December 2009 (morning) Time allowed - 3 hours plus 15 minutes reading time Please complete the following information in BLOCK CAPITALS: Student member number Venue code Desk number Date Venue name Important: This exam paper is in two sections. You should try to complete all tasks in both sections. We recommend that you use the 15 minutes reading time to study the exam 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 should use a pen rather than a pencil. You must not, during the exam, communicate with any other candidate or be in possession of unauthorised materials, such as pre-prepared notes, books, programmable calculators and dictionaries. Any of these actions will constitute malpractice and will result in disciplinary action. If you are in possession of unauthorised materials you must give them to the Supervisor before the start of the exam. Do NOT open this paper until instructed to do so by the Supervisor.

2 Glossary of terms AVC COMP ET GAYE HMRC LEL NI NIC PAYE SAP SMP SPP SSP UEL Additional voluntary contribution Contracted out money purchase (pension scheme) Earnings threshold (for National Insurance contributions) Give as you earn HM Revenue & Customs Lower earnings limit National Insurance National Insurance contribution Pay as you earn Statutory adoption pay Statutory maternity pay Statutory paternity pay Statutory sick pay Upper earnings limit 2

3 Note: This page is perforated. You may remove it for easy reference. This exam paper is in TWO sections. You must show competence in both sections. So, try to complete EVERY task in BOTH sections. Section 1 contains 3 operational tasks and Section 2 contains 10 short answer questions. You should spend about 135 minutes on Section 1 and about 45 minutes on Section 2. There is blank space for your workings on page 27, and on the back cover, but you should include all essential calculations in your answers. Both sections relate to the company described below. Introduction You are a Payroll Administrator for Fictitious Ltd. The company pension scheme is a COMP. No SSP can be recovered. The company can recover the standard 92% of any SAP, SMP and SPP it has paid out. 3

4 Note: This page is perforated. You may remove it for easy reference. Section 1 You should spend about 135 minutes on this section. Against each task is the recommended time for that task, but please note that these times are guidelines only. Data An extract of some of the final payroll records for the tax year 2008/09 is shown below. Josh Dorey Pat Lakovic Aanisah Ehsan Final tax code K T Month 1 763L Date of starting 8 January November May 2008 Date of leaving 12 December January 2009 National insurance number GT648255B RW829173D MN697214A Gross pay for year including SAP, SMP, SPP, SSP and previous employment 32, , , Pay from previous employment Nil 20, , Pension scheme contributions 1, , AVC contributions 1, Nil 1, Charitable giving for year Tax deducted for year including tax from previous employment 7, , , Tax in previous employment Nil 3, , Earnings at the LEL (where earnings reach or exceed the LEL) 3,150 1,950 3,150 Earnings between the LEL and the ET Earnings between the ET and the UEL 25,956 11,724 27,890 Employee NIC in the year 2, , , Employer NIC in the year 3, , , Student loan payments 1, ,567 SSP paid in the year Nil SMP paid in the year Nil Nil 4, SAP paid in the year Nil Nil Nil SPP paid in the year Nil 4

5 Task 1.1 Using the information given on page 4, prepare the end of year returns form P14 for each employee for the tax year 2008/09. Use the P14 forms on pages 6, 7 and 8. 5

6 For help to fill in this form, see Employer Helpbook E10 P14 End of Year Summary Your name and address as employer Fictitious Ltd Holmes Tower Fulchester Hants FU2 6GA Employer PAYE reference Tax Year to 5 April HM Revenue & Customs office name Basingstoke B Please remove sprocket margins and make separate bundles of National Insurance and Tax copies before sending in. HMRC 11/07 Employee's details National Insurance no. Surname First two forenames Works/ payroll no. National Insurance contributions in this employment NIC table letter Earnings at the LEL (where earnings are equal to or exceed the LEL) (whole s only) From col.1a on P11 In this employment Total for year Employee's Widows & Orphans/ Life Assurance contributions in this employment For employer's use Earnings above the LEL, up to and including the ET (whole s only) From col.1b on P11 Final tax code Earnings above the ET, up to and including the UEL (whole s only) From col.1c on P11 Statutory Sick Pay (SSP) Statutory Paternity Pay (SPP) p Date of birth in figures Total of employee's and employer's contributions From col.1d on P11 1f Tax deducted p Day Month Year Payment in Week 53: if included in Pay and Tax totals, enter '53', '54' or '56' here (See Employer Helpbook E10) Date of starting if during tax year to 5 April 2009 Date of leaving if during tax year to 5 April 2009 Gender Student Loan Deductions in this employment (whole s only) From col.1j on P11 Day Month Year 'M' male, 'F' female ( Note: LEL = Lower Earnings Limit, ET = Earnings Threshold UEL = Upper Earnings Limit ) Scheme Contracted-out Number If amount in col.1d is a minus amount, enter 'R' here Employee's contributions due on all earnings above the ET From col.1e on P11 p 1a 1b 1c 1d p 1e Statutory payments included in the pay In this employment figure below Copy from P11 GT B M Dorey Josh Pay and Income Tax details Pay p In previous employment(s) p 1h p 783 Employee's private address incl. postcode (if known) Statutory Maternity Pay (SMP) Statutory Adoption Pay (SAP) Enter 'R' in this box if net refund (For Contracted-out Money Purchase schemes OR Contracted-out Money Purchase Stakeholder Pension schemes only) S S S S 1g p 1i p Expenses payments and benefits paid to directors and employees: Complete form P11D or P9D if appropriate and provide a copy of the information to the employee by 6 July. See booklet CWG2 Employer Further Guide to PAYE and NICs for more details. For official use P14(Continuous Portrait)( ) To HM Revenue & Customs National Insurance copy

7 For help to fill in this form, see Employer Helpbook E10 P14 End of Year Summary Your name and address as employer Fictitious Ltd Holmes Tower Fulchester Hants FU2 6GA Employer PAYE reference Tax Year to 5 April HM Revenue & Customs office name Basingstoke B Please remove sprocket margins and make separate bundles of National Insurance and Tax copies before sending in. HMRC 11/07 Employee's details National Insurance no. Surname First two forenames Works/ payroll no. National Insurance contributions in this employment NIC table letter Earnings at the LEL (where earnings are equal to or exceed the LEL) (whole s only) From col.1a on P11 In this employment Total for year Employee's Widows & Orphans/ Life Assurance contributions in this employment For employer's use Earnings above the LEL, up to and including the ET (whole s only) From col.1b on P11 Final tax code Earnings above the ET, up to and including the UEL (whole s only) From col.1c on P11 Statutory Sick Pay (SSP) Statutory Paternity Pay (SPP) p Date of birth in figures Total of employee's and employer's contributions From col.1d on P11 1f Tax deducted p Day Month Year Payment in Week 53: if included in Pay and Tax totals, enter '53', '54' or '56' here (See Employer Helpbook E10) Date of starting if during tax year to 5 April 2009 Date of leaving if during tax year to 5 April 2009 Gender Student Loan Deductions in this employment (whole s only) From col.1j on P11 Day Month Year 'M' male, 'F' female ( Note: LEL = Lower Earnings Limit, ET = Earnings Threshold UEL = Upper Earnings Limit ) Scheme Contracted-out Number If amount in col.1d is a minus amount, enter 'R' here Employee's contributions due on all earnings above the ET From col.1e on P11 p 1a 1b 1c 1d p 1e Statutory payments included in the pay In this employment figure below Copy from P11 RW D M Lakovic Pat Pay and Income Tax details Pay p In previous employment(s) p 1h p 783 Employee's private address incl. postcode (if known) Statutory Maternity Pay (SMP) Statutory Adoption Pay (SAP) Enter 'R' in this box if net refund (For Contracted-out Money Purchase schemes OR Contracted-out Money Purchase Stakeholder Pension schemes only) S S S S 1g p 1i p Expenses payments and benefits paid to directors and employees: Complete form P11D or P9D if appropriate and provide a copy of the information to the employee by 6 July. See booklet CWG2 Employer Further Guide to PAYE and NICs for more details. For official use P14(Continuous Portrait)( ) To HM Revenue & Customs National Insurance copy

8 For help to fill in this form, see Employer Helpbook E10 P14 End of Year Summary Your name and address as employer Fictitious Ltd Holmes Tower Fulchester Hants FU2 6GA Employer PAYE reference Tax Year to 5 April HM Revenue & Customs office name Basingstoke B Please remove sprocket margins and make separate bundles of National Insurance and Tax copies before sending in. HMRC 11/07 Employee's details National Insurance no. Surname First two forenames Works/ payroll no. National Insurance contributions in this employment NIC table letter Earnings at the LEL (where earnings are equal to or exceed the LEL) (whole s only) From col.1a on P11 In this employment Total for year Employee's Widows & Orphans/ Life Assurance contributions in this employment For employer's use Earnings above the LEL, up to and including the ET (whole s only) From col.1b on P11 Final tax code Earnings above the ET, up to and including the UEL (whole s only) From col.1c on P11 Statutory Sick Pay (SSP) Statutory Paternity Pay (SPP) p Date of birth in figures Total of employee's and employer's contributions From col.1d on P11 1f Tax deducted p Day Month Year Payment in Week 53: if included in Pay and Tax totals, enter '53', '54' or '56' here (See Employer Helpbook E10) Date of starting if during tax year to 5 April 2009 Date of leaving if during tax year to 5 April 2009 Gender Student Loan Deductions in this employment (whole s only) From col.1j on P11 Day Month Year 'M' male, 'F' female ( Note: LEL = Lower Earnings Limit, ET = Earnings Threshold UEL = Upper Earnings Limit ) Scheme Contracted-out Number If amount in col.1d is a minus amount, enter 'R' here Employee's contributions due on all earnings above the ET From col.1e on P11 p 1a 1b 1c 1d p 1e Statutory payments included in the pay In this employment figure below Copy from P11 MN A F Ehsan Aanisah Pay and Income Tax details Pay p In previous employment(s) p 1h p 783 Employee's private address incl. postcode (if known) Statutory Maternity Pay (SMP) Statutory Adoption Pay (SAP) Enter 'R' in this box if net refund (For Contracted-out Money Purchase schemes OR Contracted-out Money Purchase Stakeholder Pension schemes only) S S S S 1g p 1i p Expenses payments and benefits paid to directors and employees: Complete form P11D or P9D if appropriate and provide a copy of the information to the employee by 6 July. See booklet CWG2 Employer Further Guide to PAYE and NICs for more details. For official use P14(Continuous Portrait)( ) To HM Revenue & Customs National Insurance copy

9 Task 1.2 Using the information given on page 4, and on the completed P14 forms on pages 6, 7 and 8, complete the details in the summary section of the extract of Form P35 for the tax year 2008/09. Use the form P35 on page 10. 9

10 Josh Dorey Pat Lakovic Aanisah Ehsan 28,582.76

11 Note: This page is perforated. You may remove it for easy reference. Data Aisha Nasib has enjoyed the following benefits in kind. You must now consider these for the 2008/09 tax year end P11D reporting process. 1. For part of the tax year Aisha had a company car which was also available for private use. The details are as follows: The car is a Toyota Prius VVT - i. It is a hybrid 1,497c.c. petrol engine with an electric motor. The list price, when new, first registered and supplied to Aisha on 8 September 2008, was 21,182. The car has a CO 2 rating of 104 g/km. Aisha had a tow bar fitted to the car prior to delivery and Fictitious Ltd paid for this. The cost of the tow bar was , inclusive of VAT which the company reclaimed in the normal manner. In addition the company paid for a tow bar to be fitted at a cost of an additional 35 plus 6.13 VAT. The company agreed that Aisha would pay a capital contribution of 5,000 towards the car. Payments were made by an interest-free loan of 12 instalments, starting from September Aisha paid for all the fuel used in the car and reclaimed all business travel costs from her employer at the rate of 11p a mile for each of the 2,893 miles travelled between 8 September 2008 and 5 April Before receiving the company car, Aisha used her own personal car for business purposes. She claimed an allowance of 1, for the 3,871 miles travelled between 6 April 2008 and 5 September In addition to the mileage allowance, Aisha also received a 100 contribution towards her insurance costs in order to make sure business cover was included in the policy. 3. During the year Aisha completed 15 years service with the company. This was recognised with the award of a gift to the value of 1,750. A special ceremony was held for her and five other employees who had achieved similar service. 11

12 Note: This page is perforated. You may remove it for easy reference. Task 1.3 (a) Calculate the benefit in kind values of the relevant items on page 11 using the P11D Working Sheets 2 and 6 on pages 13 to 18. (b) Complete the P11D on pages 19 and

13 P11D Working Sheet 2 Car and Car fuel benefit 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 or more a year during the year (that is 6 April 2008 to 5 April 2009). 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(2009). 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 your HM Revenue & Customs 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 details Employer name Fictitious Ltd Employer PAYE reference B18/150 The car Make and model of car available to employee Toyota Prius VVT - i Employee details Employee name Surname Forename(s) Nasib Aisha Works number or department Marketing 10 National Insurance number Date the car was first registered 08 / 09 / 2008 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 If the car was unavailable to the employee on 5 April 2009 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 2009 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 2 Accessories Price of all accessories see P11D Guide and Booklet 480(2009) 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 (2009) 1 HMRC 09/08

14 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 F g/km Enter the key letter (B, C, D, E, G, H, L or P) for the car s fuel or power type from table 1 below. TABLE 1 Key letter P D L E H B C G Fuel or power type description Petrol Diesel car not approved to Euro IV emissions standard Diesel car 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 Cars manufactured so as to be capable of running on E85, a blend of petrol and at least 85% bioethanol Next step for cars registered on or after 1 January 1998 with an approved CO 2 emissions figure if the figure in box F is more than 120, Go to section 5a if the figure in box F is 120 or less, Go to section 5b for cars registered on or after 1 January 1998 without an approved CO 2 emissions figure, Go to section 5c for cars registered before 1 January 1998, Go to section 5d. 5a Cars registered on or after 1 January 1998 with an approved CO 2 emissions figure of more than 120 Approved CO 2 emissions figure in box F, rounded down to the next lowest 5g/km, for example, 185 Stage 1 - using table 2 below, use the figure in box G to work out the percentage to enter in box H - use column 1 for: all cars in fuel types B, C, G, H and P cars in fuel type L which were first registered before 1 January use column 2 for: all cars in fuel type D cars in fuel type L which were first registered on or after 1 January TABLE 2 G H g/km % 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 (%) 135* * *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 reductions for alternative fuel/power types fuel type letters H, B and G only fuel type H - insert 3% in box J fuel types B and G - insert 2% in box J Appropriate percentage Go straight to section 6 do not complete sections 5b, 5c or 5d J N H minus J % % 2

15 5b Cars registered on or after 1 January 1998 with an unrounded approved CO 2 emissions figure of 120 or less For these qualifying low emissions cars, or QUALECs: enter 10% in box N for - all cars in fuel types B, C, G, H and P - cars in fuel type L which were first registered before 1 January 2006 enter 13% in box N for - all cars in fuel type D - cars in fuel type L which were first registered on or after 1 January 2006 Appropriate percentage Go straight to section 6 - do not complete sections 5c or 5d N % 5c Cars registered on or after 1 January 1998 without an approved CO 2 emissions figure Stage 1 - using table 3 below, work out the percentage to enter in box H - use column 1 for: all cars in fuel types C, G, H and P cars in fuel type L which were first registered before 1 January use column 2 for: all cars in fuel type D cars in fuel type L which were first registered on or after 1 January for fuel type E, insert 15% - for fuel type B, use section 5a (all such cars have CO 2 emissions figures) H % Engine size of car (cc) over 2000 all rotary engines TABLE 3 Column 1 % Column 2 % Stage 2- calculate reductions for alternative fuel/power types fuel type letters G, H and E only fuel type E - insert 6% in box J fuel type H - insert 3% in box J fuel type G - insert 2% in box J Appropriate percentage Go straight to section 6 - do not complete section 5d J N H minus J % % 5d All cars registered before 1 January 1998 Enter the engine size, then work out the percentage to enter in box N cc TABLE 4 Engine size of car (cc) over 2000 all rotary engines Percentage Appropriate percentage N % 3

16 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(2009) Q Deduction for unavailability round up to next whole number R (P x Q)/365 Car benefit for the period the car was available S P minus R 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 (ignore any decimals) Enter the figure at box U onto form P11D, at section F box 9 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 form P11D, at section F box 9 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 16,900 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)/365 Car fuel benefit charge for for this car Enter the figure at box Z onto form P11D, at section F box 10 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 form P11D, at section F box 10. Z V minus Y 4

17 Fictitious Ltd Nasib Aisha B18 / 150 Marketing 10

18 4 Approved Mileage Allowance Payments (AMAPs) Mileage rates for the kind of vehicle used Use the appropriate rates as shown in the table at section 3 on page 1. Enter the rate for the first 10,000 business miles in box 1 and the rate for each business mile over 10,000 miles in box 2 1 p 2 p First 10,000 business miles If box D is more than 10,000 enter 10,000 in box E, otherwise enter the figure from box D E X box 1 = F Balance of business miles If box D is more than 10,000 enter the excess over 10,000 in box G, otherwise leave blank G X box 2 = H Total Approved Mileage Allowance Payments The maximum amount that can count as tax-free approved mileage allowance payments for the kind of vehicle identified in section 2 (F + H) = J Compare the amounts in box C and box J If the total at box J is the same as the amount at box C, the whole amount at box C is tax-free. Enter 0 (zero) in box N in section 6. If the total at box J is more than the amount at box C, the whole amount at box C is tax-free. Enter 0 (zero) in box N in section 6. Your employee may be able to get tax relief on the difference. If the total at box J is less than the amount at box C, enter the excess (box C minus box J) in box N in section 6. 5 Passenger payments only complete this section once, however many working sheets are used Total of any passenger payments to the employee in The payments must have been made specifically for the purpose of carrying a fellow employee on a qualifying business journey in a car or van Number of business miles for which passenger payments made L X 5p = K M Compare the amounts in box K and box M and enter the following amounts in section 6 below. If the total at box M is the same as the amount in box K, the whole amount at box K is tax-free. Enter 0 (zero) in box P in section 6. If the total amount at box M is more than the amount at box K, the whole amount at box K is tax-free. Enter 0 (zero) in box P in section 6. No tax relief is available for the difference. If the total at box M is less than the amount at box K, enter the excess (box K minus box M) in box P in section 6. 6 The taxable amount Taxable payments from section 4 plus Taxable passenger payments from section 5 Total taxable payments (N + P) = N P Q The amount at box Q (where more than zero) is the excess over the tax-free amounts for Enter this amount in section E, box 12 on form P11D. If the amount at box Q is zero you do not need to report this on form P11D. If you paid the employee mileage allowances for more than one kind of vehicle during and have completed more than one working sheet, add together the amounts at box Q on each working sheet and enter the total in section E, box 12 on form P11D. If the total of the amounts at Q is zero you do not need to report this on form P11D.

19 Please ensure your entries are clear on both sides of the form. Employer name Employer PAYE reference Employee name Works number/department E Fictitious Ltd B18/150 Surname Forename(s) If a director tick here National Insurance number P11D EXPENSES AND BENEFITS Note to employer Complete this return for a director, or an employee who earned at a rate of 8,500 or more a year during the year to 5 April Send the completed form to your HM Revenue & Customs office by 6 July Note to employee Your employer has filled in this form, keep it in a safe place. You will need it to complete your Tax Return if you get one. The box numberings on this P11D are the same as on the Employment Page of the Tax Return, for example, 13. 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 Description of asset = 13 1A B Payments made on behalf of employee Description of payment 15 Tax on notional payments not borne by employee within 90 days of receipt of each notional payment 15 Amount made good or C Vouchers or credit cards Gross amount from which tax deducted Cash equivalent Value of vouchers and payments made using credit cards or tokens (for qualifying childcare vouchers the excess over 55 a week) = 12 D Living accommodation Cash equivalent Cash equivalent of accommodation provided for employee, or his/her family or household 14 1A F Nasib Aisha Marketing 10 Mileage allowance and passenger payments Taxable amount Amount of car and mileage allowances paid to employee for business travel in employee s own vehicle, and passenger payments, in excess of maximum exempt amounts (See P11D Guide for exempt rates) 12 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 Toyota Prius VVT - i Date first registered 08 / 09 / 08 Approved CO 2 emissions figure for cars registered on or after 1 January 1998 Tick box if the car does not have an approved CO 2 figure g/km See P11D Guide for details of cars that have no approved C0 2 figure / / Date of birth in figures (if known) D D M M Y Y Y Y Gender M Male F Female Engine size cc cc Type of fuel or power used Please use the key letter shown in the P11D Guide Dates car was available Do not complete the From / / to / / From / / to From box if the car was available on / / 5 April 2008 or the To box if it continued to be available on 6 April 2009 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 g/km See P11D Guide for details of cars that have no approved CO 2 figure F P11D(2009) HMRC 09/08 Accessories All non-standard accessories, see P11D Guide 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 Date free fuel was withdrawn Tick if reinstated in year (see P11D Guide) Cash equivalent of each car Total cash equivalent of all cars made available in Cash equivalent of fuel for each car Total cash equivalent of fuel for all cars made available in / / / / A 1A

20 G H Vans and van fuel Total cash equivalent of all vans made available in Total cash equivalent of fuel for all vans made available in 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 to complete this section. Number of joint borrowers (if applicable) 9 Loan 1 Loan 2 1A 1A Amount outstanding at 5 April 2008 or at date loan was made if later Amount outstanding at 5 April 2009 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 / / / / 15 1A 15 1A I Private medical treatment or insurance Private medical treatment or insurance Cost to you Amount made good or from which tax deducted = Cash equivalent 11 1A J Qualifying relocation expenses payments and benefits Non-qualifying benefits and expenses go in sections M and N below Excess over 8,000 of all qualifying relocation expenses payments and benefits for each move 15 1A K Services supplied Services supplied to the employee Cost to you Amount made good or from which tax deducted = Cash equivalent 15 1A L Assets placed at the employee s disposal Description of asset Annual value plus expenses incurred Amount made good or from which tax deducted = Cash equivalent 13 1A M Other items (including subscriptions and professional fees) Description of other items Cost to you Amount made good or from which tax deducted = Cash equivalent 15 1A Description of other items = 15 Tax paid Income tax paid but not deducted from director s remuneration 15 N Expenses payments made to, or on behalf of, the employee Cost to you Amount made good or from which tax deducted Taxable payment Travelling and subsistence payments (except mileage allowance payments for employee s own car - see section E) = 16 Entertainment (trading organisations read P11D Guide and then enter a tick or a cross as appropriate here) = 16 General expenses allowance for business travel = 16 Payments for use of home telephone = 16 Non-qualifying relocation expenses (those not shown in sections J or M) = 16 Description of other expenses = 16

21 Section 2 You should spend about 45 minutes on this section. Against each task is the recommended time for that task, but please note that these times are guidelines only. Write in the space provided, tick the appropriate box OR circle the correct answer. Do not give your answer in any other way. Task 2.1 (5 minutes) (a) By which ONE of the following dates must HMRC receive the employer s annual P14 returns and P35 summary? 6 April 22 April 19 May 6 July (b) What steps must an employer take if the year end return is rejected by HMRC and by when must this be done? (c) List THREE checks you can carry out on the year end return in order to avoid rejection by HMRC

22 Task 2.2 (5 minutes) (a) Describe how the value in the box marked This employment, Tax deducted on an employee s P14 might be a tax refund. (You can refer back to the P14s on pages 6, 7 and 8.) (b) Which ONE of the following statements best describes what an employer does with HMRC end of year paperwork when the year end P14 returns and P35 summary are submitted electronically? A paper return is essential to back up the electronic return The paper P35 summary and declaration must be submitted Paper versions are not permitted when electronic submission is made Paper P14s are needed but not a paper P35 (c) Describe why Directors NICs needs to be checked before you compete the P14 process. 22

23 Task 2.3 (4 minutes) One of the directors has received 7,000 in fees during the year. He has also benefitted from private health insurance of 1,275, and payments towards his home telephone rental of 200 during the tax year. (a) Which ONE of the following describes the action you would take over the benefits in kind? No action, the total for the tax year is less than 8,500 Complete and submit a P9D Complete and submit a P11D Complete and submit a P38S (b) Explain your answer to (a) above. (c) By which ONE of the following dates must employees receive a copy of their benefit in kind reports? 31 May 6 July 19 July 19 October Task 2.4 (3 minutes) (a) By which ONE of the following dates must the final electronic payment of PAYE be made to HMRC? 6 April 19 April 22 April 19 May (b) When the deadline for payment falls on a weekend or public holiday, when must HMRC receive the payment? By the normal deadline date On the last bank day prior to the deadline On the first bank day after the deadline Payment can be deferred to the following month (c) By which ONE of the following dates must HMRC receive the P9D/P11D forms? 6 April 31 May 6 July 31 August 23

24 Task 2.5 (5 minutes) (a) Fictitious Ltd has a contract with a medical facility which allows employees to use a confidential helpline for all work related health matters. Part of this service is an annual health check which is compulsory for all employees. Outline the tax treatment of these services. (b) Outline the tax treatment of private medical insurance paid for by the employer and used by employees. (c) Is medical insurance cover provided for employees overseas business trips a taxable benefit in kind? Yes No Task 2.6 (4 minutes) An employee has an eye test because she regularly uses a computer and Fictitious Ltd has a dispensation for tests, plus half the cost of lenses and ordinary frames. (a) Fictitious Ltd reimburses her the test cost of 27.50, new lenses costing and 85 designer frames. 15 VAT is recovered by Fictitious Ltd. What value should you report at year end? Nil (b) What value would be reported if Fictitious Ltd did not have a dispensation as described above? Nil (c) The employee s total taxable earnings, including taxable benefits in kind, are less than 8,500 for the tax year. What action would you take with the P9D which applies in this case? 24

25 Task 2.7 (3 minutes) An employee wants to buy a redundant company van. The van cost 8,500 when new, is valued at 250 in the company accounts, but is considered to have a sale value of 1,000. (a) If the van is sold for its accounting value of 250, which ONE of the following is reported as the benefit in kind amount? ,000 8,500 (b) In which ONE of the following manners would you report the benefit in kind? Letter to the tax office P9D/P11D P11D(b) P38S (c) If the employee s son buys the van, how does this change the tax treatment? Task 2.8 (5 minutes) When completing the P11D for employees, should you report the cost to the employer of the following services supplied by employers? (a) Will writing for employees of a firm of solicitors Yes No (b) Self assessment tax returns for employees of a computer repair business Yes No (c) Car servicing for family members of employees of a garage Yes No (d) Garden design work for employees of a building company Yes No (e) Explain your answer to (d) above. 25

26 Task 2.9 (6 minutes) An employee borrowed 8,000 from the company. He took the interest free loan on 6 April 2008 agreed to pay back 200 every month, starting from pay day 30 May Assume the official interest rate is 6.25% and the Class 1A NIC rate is 12.8%. (a) Explain the way the taxable benefit on the loan is calculated. (b) Using your calculation method outlined above which ONE of the following is the benefit in kind value to be reported at year end? (c) How much Class 1A NIC will be due? (d) By which ONE of the following dates must a Class 1A NIC cheque payment be made? 22 April 19 July 6 August 19 October Task 2.10 (5 minutes) The company decides to open a restaurant in its head office as a free service available to directors and senior management only. (a) What are the tax implications of this action? (b) If the restaurant were open to all staff, what effect would it have on your answer to (a) above? (c) If company clients were occasionally entertained in the restaurant, would the cost be reportable to HMRC? Yes No 26

27 Note: You may use this page for your workings. 27

28 QCF qualification codes Level 3 Certificate in Payroll Administration Unit number (CYE) Y/101/8093 Association of Accounting Technicians (AAT) Aldersgate Street, London EC1A 4HY, UK t: (UK) +44 (0) (non-uk) e:aat@aat.org.uk w: aat.org.uk