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Question 1b

On 6 April 2011 Flick Pick, aged 23, commenced employment with 3D Ltd as a film critic. On 1 January 2012 she commenced in partnership with Art Reel running a small cinema, preparing accounts to 30 April. The following information is available for the tax year 2011–12:

Employment
(1) During the tax year 2011–12 Flick was paid a gross annual salary of £23,700.

(2) Throughout the tax year 2011–12 3D Ltd provided Flick with living accommodation. The company had purchased the property in 2002 for £89,000, and it was valued at £144,000 on 6 April 2011. The annual value of the property is £4,600. The property was furnished by 3D Ltd during March 2011 at a cost of £9,400.

Partnership
(1) The partnership’s tax adjusted trading profit for the four-month period ended 30 April 2012 is £29,700. This figure is before taking account of capital allowances.

(2) The only item of plant and machinery owned by the partnership is a motor car that cost £15,000 on 1 February 2012. The motor car has a CO2 emission rate of 190 grams per kilometre. It is used by Art, and 40% of the mileage is for private journeys.

(3) Profits are shared 40% to Flick and 60% to Art. This is after paying an annual salary of £6,000 to Art.

Property income
(1) Flick owns a freehold house which is let out furnished. The property was let throughout the tax year 2011–12 at a monthly rent of £660.

(2) During the tax year 2011–12 Flick paid council tax of £1,320 in respect of the property, and also spent £2,560 on replacing damaged furniture.

(3) Flick claims the wear and tear allowance.

Value added tax (VAT)
(1) The partnership voluntarily registered for VAT on 1 January 2012, and immediately began using the flat rate scheme to calculate the amount of VAT payable. The relevant flat rate scheme percentage for the partnership’s trade is 12%.

(2) For the quarter ended 31 March 2012 the partnership had standard rated sales of £59,700, and these were all made to members of the general public. For the same period standard rated expenses amounted to £27,300. Both figures are stated inclusive of VAT.

(3) The partnership has two private boxes in its cinema that can be booked on a special basis by privileged customers. Such customers can book the boxes up to two months in advance, at which time they have to pay a 25% deposit. An invoice is then given to the customer on the day of the screening of the film, with payment of the balance of 75% required within seven days. For VAT purposes, the renting out of the cinema boxes is a supply of services.

Required:
(b) State what classes of national insurance contribution will be paid in respect of Flick Pick’s income for the tax year 2011–12, and in each case who is responsible for paying them.

Note: You are not required to calculate the actual national insurance contributions. (4 marks)