Question 4a
| Note | £ | £ | |
|---|---|---|---|
| Revenue | 1 | 71,900 | |
| Expenses | |||
| Motor expenses | 2 | 4,400 | |
| Other expenses | 3 | 8,200 | |
| Capital allowances | 4 | 6,900 | (19,500) |
| Trading profit | 52,400 |
Note 1 – Revenue
The revenue figure of £71,900 includes receivables of £1,600 which were owed as at 5 April 2014.
Note 2 – Motor expenses
The total motor expenses for the year ended 5 April 2014 were £5,500, of which 20% was for private journeys. This proportion has been disallowed in calculating the trading profit. During the year ended 5 April 2014, Chi drove 13,200 business miles.
Note 3 – Other expenses
The other expenses figure of £8,200 includes payables of £900 which were owed as at 5 April 2014.
Note 4 – Capital allowances
Capital allowances consist of an annual investment allowance claim of £4,020 in respect of office equipment purchased on 6 April 2013, and a writing down allowance of £2,880 claimed in respect of Chi’s motor car. The motor car had cost £20,000 on 6 April 2013.
Additional information
Chi has no other income for the tax year 2013–14.
She did not make any payments on account in respect of the tax year 2013–14.
Required:
(a) Based on the trading profit of £52,400 for the year ended 5 April 2014:
(i) Calculate Chi Needle’s income tax liability for the tax year 2013–14. (2 marks)
(ii) Calculate the class 2 and class 4 national insurance contributions payable by Chi Needle for the tax year 2013–14. (3 marks)
(iii) Determine the amount of income tax and national insurance contributions which will be due for payment under self-assessment by Chi Needle on 31 January 2015. (3 marks)