ACCA TX ^UK Syllabus B. Income Tax And Nic Liabilities - Motor cars, Vans and private fuel benefit - Past Papers ^{9 / 12}

Samson and Delilah are a married couple. Samson was born on 24 June 1964 and Delilah was born on 6 May 1962.

They are both employed by Rope plc, and Delilah is also a partner in a partnership. The following information is vailable in respect of the tax year 2014–15:

Delilah
(2) Throughout the tax year 2014–15, Rope plc provided Delilah with a petrol powered motor car which has a list price of £67,200, and an official CO2 emission rate of 207 grams per kilometre. Rope plc does not provide Delilah with any fuel for private journeys. Delilah was unable to drive her motor car for a period during the tax year 2014–15 because of a skiing accident, and during this period Rope plc provided her with a chauffeur at a total cost of £9,400.

Required:
What taxable benefit will arise due to Rope Plc providing the car?

Car benefit percentage

The relevant base level of CO2 emissions is 95 grams per kilometre.

The percentage rates applying to petrol cars with CO2 emissions up to this level are:

75 grams per kilometre or less 5%
76 grams to 94 grams per kilometre 11%
95 grams per kilometre 12%

Note 2 – Car and fuel benefits
Throughout the tax year 2013–14, Prog plc provided Richard with a petrol-powered motor car which has a list price of £17,900. The motor car cost Prog plc £17,200, and it has a CO2 emission rate of 144 grams per kilometre. During the tax year 2013–14, Richard made contributions of £1,200 to Prog plc for the use of the motor car.

During the period 1 July 2013 to 5 April 2014, Prog plc also provided Richard with fuel for private journeys. The total cost of fuel during the period 1 July 2013 to 5 April 2014 was £4,200, of which 45% was for private journeys.

Richard did not make any contributions towards the cost of the fuel.

Required:
What is the car benefit that will arise?

Car benefit percentage

The relevant base level of CO2 emissions is 95 grams per kilometre.

The percentage rates applying to petrol cars with CO2 emissions up to this level are:

75 grams per kilometre or less 5%
76 grams to 94 grams per kilometre 10%
95 grams per kilometre 11%

John and Rhonda Beach are a married couple. The following information is available for the tax year 2012–13:

John Beach
(4) During the period from 1 November 2012 to 5 April 2013, Surf plc provided John with a petrol powered motor car which has a list price of £28,200 and an official CO2 emission rate of 206 grams per kilometre. Surf plc also provided John with fuel for both his business and private journeys.

Required:
What taxable benefit arises because of the motor car and private fuel provided by the employee?

Car benefit percentage

The relevant base level of CO2 emissions is 100 grams per kilometre.

The percentage rates applying to petrol cars with CO2 emissions up to this level are:

75 grams per kilometre or less 5%
76 grams to 99 grams per kilometre 10%
100 grams per kilometre 11%

On 30 June 2011 Josie Jones, aged 42, ceased self-employment as a graphic designer. On 1 August 2011 she commenced employment with Typo plc as a creative director. The following information is available for the tax year 2011–12:

Employment
(5) During the period from 1 October 2011 to 5 April 2012, Typo plc provided Josie with a diesel powered motor car with an official CO2 emission rate of 149 grams per kilometre. The motor car, which has a list price of £14,400, cost Typo plc £13,900. Typo plc does not provide Josie with any fuel for private journeys.

Required:
What are the taxable benefit values to be included in the income Tax Computation?

Car benefit percentage

The base level of CO2 emissions is 125 grams per kilometre.

A rate of 5% applies to petrol cars with CO2 emissions of 75 grams per kilometre or less, and a rate of 10% applies
where emissions are between 76 and 120 grams per kilometre.