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Telegram：ukassignment021 指导英国Coursework assignment
Lulu and Rex
Lulu and Rex are married and live together in a nice house in Primrose Hill, North London, owned together. They have a baby called Tinkerbell and a nanny called Wendy.
Lulu is an ambitious person but her career so far has not been a conspicuous success. Lulu was the sales director of Wodwo plc and had been since 6 April 2009. Before that Lulu was working abroad. At Wodwo plc Lulu received a generous remuneration package, consisting of the following:
• A car selected by Lulu. The list price of this car is £90,000. She contributed £9,000 toward the capital cost on 6 April 2009. All fuel for private and business mileage was paid for by the company.
• Salary (see Note 1)
• Private medical insurance costing the company £3,000 for a full year. Lulu could have obtained it herself for £3,500 a year. Lulu was removed from the company scheme from 1 January 2011 so she will now have to make own arrangements.
• Lulu borrowed money from the company on 6 April 2009 (see Note 2)
• 英国assignment Lulu was in the non-contributory directors' pension scheme. The company made contributions to the value of Lulu's salary each year. It is a final salary scheme.
Lulu was not happy at Wodwo. She found her colleagues had different commercial goals from her. They too found Lulu rather a strain and on 31 December 2010 she was handed a P45 and escorted from the building. In other words, Lulu had been sacked with immediate effect. Lulu’s P45 shows income tax deducted of £29,000. She did not receive any redundancy payments or other payments apart from her salary up to 31 December.
She was, however, offered her car for nothing, and Lulu took possession of it on 31 December 2010. Its original market value was the list price. Its market value on 31 December 2010 is £40,000. Also, the company cancelled Lulu's loan obligation on 31 December 2010.
After leaving Wodwo she stayed at home for a period of reflection.
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Rex meanwhile calls himself a businessman. He owns several properties and he has a separate business. He does his own book-keeping and tax.
The Properties
Rex owns a furnished cottage in Norfolk. He and Lulu stay there for the whole of August as a rule. The rest of the time it is available for rent at £600 a week, and advertised on a holiday cottage web-site. It is let for 12 weeks to different tenants. No tenant stays for more than thirty days at a time. Rex has elected for the 10% wear and tear allowance.
Rex owns three furnished flats in North London. Flat One is rented out to students. Flat Two is rented out to a strange couple called Assia and David. Flat Three is a crack house and is in a shocking condition. It is being occupied illegally by drug dealers but the police are refusing to clear it because the Drug Squad are using it in a surveillance operation. The police are paying the annual rent of £15,000 because of this.#p#分页标题#e#
Flat One has three students as tenants. The quarterly rent for the whole flat is £800, payable in advance. The students are sociable creatures and have a party every Saturday night. They refuse to pay the quarter due on 31 December because the central heating is not working properly. Bernard has threatened to set Renee Wisbey on them if they don’t pay up, but he has also said he will fix the central heating.
The annual rent on Flat Two at the start of the year was £8,000. Assia and David are going through marital difficulties and Assia moves out on 31 December and goes to live with a famous poet. David returns to his native New Zealand on 31 January leaving the flat empty. Bernard finds a new tenant who moves in on 1 March with an annual rent of £12,000.
Bernard believes that Flat Three will have to be gutted when the police remove the drug dealers and completely refurbished. He reckons this will cost at least £150,000 but will be completely tax allowable he asserts.
Flat One is on the wear and tear basis; Flats Two and Three on the renewals basis.
Rex also owns two unfurnished shops: one in Wood Green, one in Peckham. He has not been able to find a tenant for the Peckham shop.
See Appendix One for further information about the properties.
The Business
Rex also owns an import/export business whose detailed activities are shrouded in mystery though it clearly makes large profits. It is based in a rented property in Camden Town and employs 36 full-time workers, including 3 office staff, one sales representative and 10 part-time staff. The payroll also includes Lulu who received £55,000 in 2010/11 and has never done any work for Rex’s businesses. Lulu and Rex’s nanny is also on the payroll and was paid £35,000 in 2010/11. Rex helps himself to a wad of £500 in cash drawn out of the business account each day, except Saturdays, Sundays and bank holidays. The warehouse workers are paid weekly in cash; office staff are paid monthly by cheque.
Only Rex knows how much profit this business makes and he is not in a hurry to tell anybody, least of all the authorities. He has never told HMRC about the existence of this business and so have never paid any tax on the profits. Also, Bernard has never applied the PAYE scheme to any employee as Rex has wanted the whole operation to be kept secret. Part-time staff each receive £150 a week gross. The sales representative drives a car owned by Rex and drives both business and private mileage. There are also various “consultants” who are paid by the business on production of invoices for various services rendered. Rex also pays £18 a week to each of his full-time employees and £10 a week to each of his part-time employees as subsistence payments, intended to cover travel to work, lunch, etc. the full-time staff have received them since 6 April 2009
Rex uses his own car for business purposes and is paid 350p per mile. Rex has just received a letter from HMRC stating that a PAYE audit team will shortly be arriving at the office in Camden Town. It seems that the Revenue is acting on an anonymous tip-off from an ex-employee.#p#分页标题#e#
Rex’s tax affairs have always been a mystery, particularly to the tax authorities. None of his activities are carried out through corporate bodies as he has a strong reluctance to make public any of his affairs. Indeed until now no authority has been aware of the existence of Rex’s “empire”. The last time Rex paid any income tax was when he was working as a kipper slitter aged 16 in a fish factory.
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After a few days reflecting about her future, Lulu embarks on a new venture: she decides to set up her own business making and selling something she had always loved: clothes. She finds a disused warehouse and enters into a bargain rental agreement immediately. She hunts out a high quality designer and cutter to work for her. Lulu's friend Fleur, a graduate of London South Bank University, produced the projected profit and loss accounts on the next page for this business.
Lulu plans to start trading on 1 May 2011 and intends the first period of account to run to 31 July 2012. The 31 July will be the permanent year-end. She is not interested in incorporating or taking on any partners. Lulu continues to use the car she received from Wodwo plc and uses it 60% of the time in her new business.
LULU'S GLADRAGS Forecast profit and loss accounts
2012 2013 2014 2015
Income £ £ £ £
Sales of clothes 25,000 600,000 800,000 900,000
Cost of materials (6,000) (120,000) (240,000) (360,000)
Gross profit 19,000 480,000
560,000
540,000
Expenses
Staff salaries 130,000 145,000 150,000 165,000
Lulu's salary 50,000 55,000 60,000 70,000
Gifts to Fleur 13,000 15,000 16,000 18,000
Electricity 1,800 1,820 1,830 1,835
Rent 11,500 12,000 12,500 13,000
Lulu car exps 1,000 1,200 1,300 1,400
Loan interest 45,000 45,000 45,000 45,000
Legal 2,000 1,400 1,300 1,200
Rent 30,000 30,000 35,000 35,000
Depreciation 1,100 1,200 1,300 1,400
Entertaining 560 650 700 750
Business rates 23,000 30,000 45,000 55,000
Clothing 2,000 3,000 3,000 3,400
Holidays 3,000 4,000 5,000 6,000
Furniture 1,100 1,200 1,300 1,400
Expenses 315,060 346,470 379,230
418,385
Profit/(loss) (296,060)
133,530 180,770 121,615
Notes to accounts
1. Lulu has forgotten to include Class 1 Secondary NICs in costs.
2. Lulu’s car is used 40% privately.
3. Loan interest is fully business. She will borrow £500,000 in 2010.
4. Entertaining is of business contacts
5. Clothing is business suits for Lulu
6. Holidays are for Lulu and Rex.
7. Furniture is for the flat she shares with Rex.
8. Cost of sales includes purchase of clothes and getting them into saleable condition.
9. Fleur does not work in the business; she does occasional jobs such as these accounts
分页标题#e# estimates her capital expenditure in her first period of account
As follows:
£
Refurbishment of warehouse 200,000
(to get it in working order)
Clothing manufacturing equipment 120,000
Other furniture and fittings 15,000
Computers 18,000
Car for employee 1 May 2011 (less than 110g/km CO2) 15,000
Lulu’s car (see above) will be used in her new business. 40% of its use will be private. Its value for capital allowance purposes will be £30,000 at the start of the business.
Lulu has not made alternative pension plans and is in need of advice.
Lulu also has other income in 2010/2011 as follows:
£
UK Dividends received net 10,500
Bank interest received net 7,000
NSB Easy Access Savings A/c 560
NOTES TO ASSIGNMENT
Note 1 Lulu's salary
To calculate Lulu's annual salary:
a) Reverse the digits of your date of birth
b) Divide this number by 3 to get Lulu's annual salary.
For example birth date 31 December 1984 becomes 841,231 divided by 3 = annual salary of £280,410 for the assignment. Round to the nearest whole number
Give your date of birth prominently on the title page of the report
Note 2 Lulu's loan
Find your height in centimetres and multiply by 100. Use this as the sterling value of the loan. We may have to audit this figure so make sure you tell us what it is and that it is accurate.
REQUIRED
Individual work. (Worth 50% of your total coursework mark)
PART (A).
LETTER TO LULU
Write a report, addressed to Lulu, whom you should assume hase a very limited understanding of taxation matters, giving your answers and full workings on each of these issues.
Detailed requirements to be included in the report:
1. Explain the difference in treatment between allowable expenses for employees, and allowable expenses for the self-employed. (5 marks)
2. Calculate Lulu’s taxable income from employment for 2010/2011. (6 marks)
3. Calculate Lulu’s taxable trading profits before loss reliefs for the years 2011/2012 to 2014/2015. (10 marks)
4. Discuss what Lulu could do with the opening year loss and recommend an efficient course of action. (9 marks)
5. Calculate income tax payable by Lulu for 2010/2011 assuming the most efficient loss relief is used. (5 marks)
Total 35 marks for report to Lulu.
ASSUME THE TAX RATES FOR 2010/2011 APPLY TO ALL PERIODS
The Official Rate of Interest is 4%
Indicative word count 1,500 words
PART (B).
LETTER TO REX
Write a letter to Rex explaining the following:
1. Disclosure requirements for taxable income (2 marks)
2. Penalties for not disclosing taxable profits (2 marks)
3. The responsibilities of employers under the PAYE system (3 marks)
4. Penalties for getting tax and NICs under PAYE wrong (2 marks)#p#分页标题#e#
5. VAT penalties the business will incur (2 marks)
6. Calculate what Rex’s taxable property income for 2010/11 should have been (4 marks)
Total 15 marks for letter to Rex.
Suggested word-count 1,500 words.
TOTAL MARKS FOR ASSIGNMENT = 50
There must be one bibliography covering both documents, referenced in the Harvard style.
These documents must be electronically produced, using Excel and Word, and printed on A4 paper. It must be submitted to the Faculty Office (Room L105) no later than closing time on 26 January 2011. You must keep a duplicate copy of all work submitted for assessment
We do not require an electronic copy to be handed in.
IMPORTANT NOTE
Plagiarism is a serious academic offence that could lead to you failing this unit. Your work should be your own at all times. Further information about what constitutes plagiarism can be found in your Course Guide and the University Student Handbook. If you have any questions about what constitutes plagiarism address these to the Course Director and the unit leader for this unit BEFORE submitting this assignment”.
Appendix One – Property information
Rex’s rented properties 2010/11
Furnished cottage in Norfolk
Rental income 10000
Cleaner 5200
Advertising 500
Council tax 1100
Insurance (proper) 780
Water rates 550
Replacement furniture 1200
Legal fees 1500
Gardener 1200
Repairs 800
Total expenses 12830
Furnished flats in North London
1 2 3
指导英国assignmentRent see text see text see text
Expenses
New furniture 15000 3000 see text
"Insurance" 1200 500 1000
Repairs 300 500 0
Legal 250 1500
shops
wood gn peckham
Rent 25000 0
business rates 1500 2000
water rates 750 800
Repairs 350 570
Adverts 120 300