Payroll Qualification Question paper Level 3 Certificate ... · PDF filePayroll Qualification...

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 Desk number

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

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.

4


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 K314 275T Month 1 763L

Date of starting 8 January 1992 24 November 2008 12 May 2008

Date of leaving 12 December 2008 23 January 2009

National insurance number GT648255B RW829173D MN697214A

Gross pay for year including SAP, SMP, SPP, SSP and previous employment 32,731.79 34,769.28 47,653.47

Pay from previous employment Nil 20,779.69 7,846.67

Pension scheme contributions 1,916.38 895.33 2,547.64

AVC contributions 1,575.00 Nil 1,600.00

Charitable giving for year 675.00 500.00 460.00

Tax deducted for year including tax from previous employment 7,150.80 5,700.20 8,872.00

Tax in previous employment Nil 3,350.60 1,576.00

Earnings at the LEL (where earnings reach or exceed the LEL) 3,150 1,950 3,150

Earnings between the LEL and the ET 567 315 567

Earnings between the ET and the UEL 25,956 11,724 27,890

Employee NIC in the year 2,457.80 1,097.04 2,517.87

Employer NIC in the year 3,296.51 1,332.21 4,273.11

Student loan payments 1,933 732 2,567

SSP paid in the year 331.76 50.72 Nil

SMP paid in the year Nil Nil 4,841.95

SAP paid in the year Nil Nil Nil

SPP paid in the year 234.36 234.36 Nil

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.

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P14 End of Year Summary 2008-09

For employer's use

For official use

Your name and address as employer

Employer PAYE reference

Day Month Year

Surname

Tax Year to 5 April

��

Gender

Student Loan Deductions in this employment (whole £s only) From col.1j on P11 £

£ pTax deducted

£ pPay

Day Month Year Final tax code

In previousemployment(s)

In this employment

Total for year

Employee's Widows & Orphans/ Life Assurance contributions

in this employment

£ p

Date of birth in figures

'M' – male,'F' – female

NationalInsurance no.

Works/payroll no.

First twoforenames

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 leavingif during tax year to 5 April 2009

HM

RC11

/07

HM Revenue & Customs office name

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NICtableletter

( Note: LEL = Lower Earnings Limit, ET = Earnings Threshold UEL = Upper Earnings Limit )

SchemeContracted-outNumber

(For Contracted-out Money Purchase schemes OR Contracted-out Money Purchase Stakeholder Pension schemes only)

Total of employee'sand employer'scontributions

From col.1a on P11

From col.1c on P11

From col.1d on P11 From col.1e on P11

1g

From col.1b on P11

Earnings above the LEL,up to andincludingthe ET(whole £s only)

Earnings above the ET, up to andincluding the UEL(whole £s only)

1f

Employee'scontributions dueon all earningsabove the ET

Statutory Sick Pay (SSP)

Statutory Paternity Pay (SPP)

If amount in col.1d isa minus amount, enter 'R' here

�

1a 1c 1d 1e£ p£ £ £p 1b £

£ pStatutory Maternity Pay (SMP)

Statutory Adoption Pay (SAP)

1i £ p1h £ p

£ p

Employee's details

Employee's private address incl. postcode (if known)

National Insurance contributions in this employment

SSSS

Statutory payments included in the pay ‘In this employment’ figure below

Pay and Income Tax details

783

P14(Continuous–Portrait)(2008-09) National Insurance copyTo HM Revenue & Customs

783For help to fill in this form,see Employer Helpbook E10

Earnings atthe LEL (where earnings areequal to orexceed the LEL)(whole £s only)

Enter 'R' in this box if net refund

EExxppeennsseess ppaayymmeennttss aanndd bbeenneeffiittss ppaaiidd ttoo ddiirreeccttoorrss aanndd eemmppllooyyeeeess:: 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.

Copy from P11

Fictitious LtdHolmes TowerFulchesterHants FU2 6GA

2009

Basingstoke

B18 150

GT 64 82 55 B M

DoreyJosh


For employer's use

For official use



Day Month Year

Surname

Tax Year to 5 April

��

Gender


£ pTax deducted

£ pPay



In this employment

Total for year


in this employment

£ p




Works/payroll no.

First twoforenames



�

�


Date of leaving if during tax year to 5 April 2009

HM

RC11

/07


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NICtableletter




Total of employee'sand employer's contributions

From col.1a on P11

From col.1c on P11


1g

From col.1b on P11

Earnings above the LEL,up to andincluding the ET(whole £s only)

Earnings above the ET, up to andincludingthe UEL(whole £s only)

1f





�

1a 1c 1d 1e£ p£ £ £p 1b £



1i £ p1h £ p

£ p

Employee's details



SSSS

Statutory payments included in the pay ‘In thisemployment’ figure below


783



Earnings atthe LEL (where earnings areequal to orexceed the LEL) (whole £s only)

Enter 'R' inthis box ifnet refund


Copy from P11


2009

Basingstoke

B18 150

RW 82 91 73 D M

LakovicPat


For employer's use

For official use



Day Month Year

Surname

Tax Year to 5 April

��

Gender


£ pTax deducted

£ pPay



In this employment

Total for year


in this employment

£ p




Works/payroll no.

First twoforenames



�

�


Date of leavingif during tax year to 5 April 2009

HM

RC11

/07


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NICtableletter




Total of employee'sand employer'scontributions

From col.1a on P11

From col.1c on P11


1g

From col.1b on P11

Earnings above the LEL,up to andincludingthe ET(whole £s only)

Earnings above the ET, up to andincluding the UEL(whole £s only)

1f





�

1a 1c 1d 1e£ p£ £ £p 1b £



1i £ p1h £ p

£ p

Employee's details



SSSS

Statutory payments included in the pay ‘In this employment’ figure below


783



Earnings atthe LEL (where earnings areequal to orexceed the LEL)(whole £s only)

Enter 'R' in this box if net refund


Copy from P11


2009

Basingstoke

B18 150

MN 69 72 14 A F

Ehsan

Aanisah

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.

Josh DoreyPat LakovicAanisah Ehsan

28,582.76

11


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 CO2 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 £287.75, inclusive of £42.85 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 2008.

• 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 2009.

2. Before receiving the company car, Aisha used her own personal car for business purposes. She

claimed an allowance of £1,862.40 for the 3,871 miles travelled between 6 April 2008 and 5 September 2008. 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.

12


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 20.

P11D Working Sheet 2 Car and Car fuel benefit 2008-09

Note to employerYou do not have to use this form but you may find it a usefulway to calculate the cash equivalent for each car made availableto a director or an employee who earned at a rate of £8,500 ormore a year during the year 2008-09 (that is 6 April 2008 to 5 April 2009).

A separate form is needed for each car provided to the directoror employee during 2008-09.

Read the P11D Guide before you complete this form. It refers toparagraphs in Booklet 480(2009).

You are advised to keep a copy of each completed workingsheet as it could help you to deal with enquiries. You do nothave to give a copy of the completed working sheet to thedirector or employee, or to your HM Revenue & Customs office.But you must fill in forms P11D and P11D(b) ‘Return of Class 1ANational Insurance contributions’ whether or not you use thisform 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 detailsEmployer name


The car

Make and model of car available to employee

Date the car was first registered

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 2008-09.

If more than one working sheet 2 is completed for this employee, enter the number of sheets here

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 2009. If the car was unavailable to the employee on 5 April 2009 then use the last day in the tax year 2008-09 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

Accessories

Price of all accessories see P11D Guide and Booklet 480(2009)

Capital contributions

Capital contributions made by the employee towards the cost of the car or the accessories max £5,000

The price used to calculate the car benefit charge for 2008-09

This box is subject to a maximum of £80,000

P11D WS2 (2009) 1

1

£A

£B

£C

£D

2

3

A + B

4

£EC minus D

HMRC 09/08

/ /

Employee detailsEmployee name

Works number or department National Insurance number

Surname

Forename(s)

� �

Fictitious Ltd

B18/150

NasibAisha

Marketing 10

Toyota Prius VVT - i

08 09 2008

Cars registered on or after 1 January 1998 with an approved CO2 emissions figure of more than 120

Approved CO2 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 2006

- use column 2 for: • all cars in fuel type D• cars in fuel type L which were first registered on or after 1 January 2006.

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 percentageGo straight to section 6 – do not complete sections 5b, 5c or 5d

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 CO2 emissions figure.

Approved CO2 emissions figure, if the car has one unrounded, for example 188

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.

5

5a

%J

Next step

• for cars registered on or after 1 January 1998 with an approved CO2 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 CO2 emissions figure, Go to section 5c

• for cars registered before 1 January 1998, Go to section 5d.

Key letter Fuel or power type description

PetrolDiesel car not approved to Euro IV emissions standardDiesel car approved to Euro IV emissions standardElectric OnlyHybrid electric (combination of petrol engine and electric motor)Gas only or bi-fuel car with approved CO2 emissions figure forGas when first registeredConversion and all other bi-fuel cars with approved CO2 emissionsfigure for Petrol only when first registeredCars manufactured so as to be capable of running on E85, a blendof petrol and at least 85% bioethanol

PDLEHB

C

G

*These are the minimum and maximum CO2 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.

CO2emissions(g/km)

135* 15 18 170 22 25 205 29 32140 16 19 175 23 26 210 30 33145 17 20 180 24 27 215 31 34150 18 21 185 25 28 220 32 35155 19 22 190 26 29 225 33 35160 20 23 195 27 30 230 34 35165 21 24 200 28 31 235* 35 35

Column 1

(%)

Column 2

(%)

CO2emissions(g/km)

Column 1

(%)

Column 2

(%)

CO2emissions(g/km)

Column 1

(%)

Column 2

(%)

G g/km

NH minus J

%

2

%H

F g/km

TABLE 1

TABLE 2

3

Cars registered on or after 1 January 1998 with an unrounded approved CO2 emissions figureof 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 percentageGo straight to section 6 - do not complete sections 5c or 5d

Cars registered on or after 1 January 1998 without an approved CO2 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 2006

- use column 2 for: • all cars in fuel type D• cars in fuel type L which were first registered on or after 1 January 2006

- for fuel type E, insert 15%- for fuel type B, use section 5a (all such cars have CO2 emissions figures)

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 percentageGo straight to section 6 - do not complete section 5d

All cars registered before 1 January 1998

Enter the engine size, then work out the percentage to enter in box N

Appropriate percentage

5b

5c

H

Engine size of car (cc)

0 - 1400

1401 - 2000

over 2000

all rotary engines

15

25

35

35

18

28

35

35

Column 1%

Column 2%

J

NH minus J

5d

Engine size of car(cc)

0 - 1400

1401 - 2000

over 2000

all rotary engines

15

22

32

32

Percentage

%

%

N %

%

cc

TABLE 3

TABLE 4

N %

4

Make any deductions for payments for private use

Enter any required payments made for private use of the car in the year

Car benefit charge for 2008-09 for this car (ignore any decimals)Enter the figure at box U onto form P11D, at section F box 9If 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

Calculate the car fuel benefit charge if appropriate - see P11D Guide

Car fuel benefit charge for the whole of this tax year

Calculate any required deductionsDays the car was unavailable from section 7

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 Qdo not include the same day in both box Q and box W

Total days for which no car fuel benefit charge applies

Deduction round up to next whole number

Car fuel benefit charge for 2008-09 for this carEnter the figure at box Z onto form P11D, at section F box 10If the employee had more than one car available in the year, add together all the figures at box Zon each working sheet, then transfer the total to form P11D, at section F box 10.

8

£T

£US minus T

£V£16,900 x N

Q

W

XQ + W

9

£Y(V x X)/365

£ZV minus Y

/ /

Calculate the car benefit for a full year

Ignore any decimals when completing box P

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)

Deduction for unavailability round up to next whole number

Car benefit for the period the car was available

6

£PE x N

7

/ /

Q

£R(P x Q)/365

£SP minus R

/ /

Fictitious Ltd

B18 / 150

Nasib

Aisha

Marketing 10

4 Approved Mileage Allowance Payments (AMAPs)

Mileage rates for the kind of vehicle usedUse 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

First 10,000 business milesIf box D is more than 10,000 enter 10,000 in box E, otherwise enter the figure from box D

Balance of business milesIf box D is more than 10,000 enter the excess over 10,000 in box G, otherwise leave blank

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) =

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.

21

pp

X box 1 =

X box 2 =

5 Passenger payments only complete this section once, however many working sheets are used

Total of any passenger payments to the employee in 2008–09The 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 X 5p =

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.

The taxable amount

Taxable payments from section 4plusTaxable passenger payments from section 5

Total taxable payments (N + P) =

The amount at box Q (where more than zero) is the excess over the tax-free amounts for 2008–09. 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 2008–09 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.

6

E

G

£F

£H

£J

L

£K

£M

£N

£P

£Q

Employee name

Works number/department National Insurance number

P11D EXPENSES AND BENEFITS 2008–09Note to employerComplete this return for a director, or an employee who earned at arate of £8,500 or more a year during the year to 5 April 2009. Send thecompleted form to your HM Revenue & Customs office by 6 July 2009.

Note to employeeYour employer has filled in this form, keep it in a safe place. You willneed it to complete your 2008–09 Tax Return if you get one. The boxnumberings on this P11D are the same as on the Employment Page ofthe Tax Return, for example, 13.

If a director tick here �

P11D

(200

9)H

MRC

09/0

8

Employer name


A

B

£ £

£ £

E

/ /

Cash equivalent

Cash equivalent

£

£

£

/ /

£

£

£

Employers pay Class 1A National Insurance contributions on most benefits. These are shown in boxes which are brown and have a 1A indicator

Cash equivalent

1A

1A

1A

1A

Gross amount

Amount made good or from which tax deducted


/ / / // / / /

Taxable amount

Cost/Market value

£ £

/ / / /

Assets transferred (cars, property, goods or other assets)

Description of asset – =

Payments made on behalf of employee

Description of payment

Tax on notional payments not borne by employee within 90 days of receipt of each notional payment

– =

Cash equivalent of accommodation provided for employee, or his/her family or household

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 2008–09 exempt rates)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

Date first registered

Approved CO2 emissions figure for cars registered on or after 1 January 1998 Tick box if the car does not have an approved CO2 figure

g/km g/km

Engine size cc ccType of fuel or power used Please use the

key letter shown in the P11D Guide

Dates car was available From to From to

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

Accessories All non-standard accessories, see P11D GuideCapital contributions (maximum £5,000)the employee made towards the cost of car or accessories

Amount paid by employee for private use of the car

Total cash equivalent of all cars made available in 2008–09

Total cash equivalent of fuel for all cars made available in 2008–09

F

C

D

Cash equivalent of each car

Date free fuel was withdrawn Tick if reinstated in year (see P11D Guide)

Cash equivalent of fuel for each car

£ £

£ £

See P11D Guide for details of cars that have no approved CO2 figure

Value of vouchers and payments made using credit cards or tokens(for qualifying childcare vouchers the excess over £55 a week)

Mileage allowance and passenger payments

Living accommodation

Vouchers or credit cards

Please ensure your entries are clear on both sides of the form.

Date of birth in figures (if known)

Gender M – Male F – Female

D D M M Y Y Y Y

13 £

15 £

15 £

12 £

14 £

12 £

9 £

10 £

Surname

Forename(s)

See P11D Guide for details of cars that have no approved C02 figure

Do not complete the‘From’ box if the car was available on 5 April 2008 or the ‘To’ box if it continued to beavailable on 6 April 2009

Fictitious Ltd

B18/150

NasibAisha

Marketing 10 F

Toyota Prius VVT - i

08 09 08

G

H

£ £

£

£

£

£

/ /

£

£

£

£

/ /

£ £

Cost to you Cash equivalentI

J

£ £

Cost to you Cash equivalentK

Annual value plusexpenses incurred Cash equivalent

L

MCost to you

£ £

Taxable paymentCost to youN

£ £

£ £

£ £

£ £

£ £

£ £

Tax paid

1A

1A

1A1A

1A

1A

1A

/ / / /

£ £

1A





Cash equivalent

1A

Amount made good orfrom which tax deducted

–

–

–

–

–

–

–

–

–

–

–

=

=

=

=

=

=

=

=

=

=

=

Vans and van fuel

Services supplied

Other items (including subscriptions and professional fees)

Assets placed at the employee’s disposal

Interest-free and low interest loansIf 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.

Loan 1 Loan 2

Number of joint borrowers (if applicable)

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 2008–09 – enter “NIL” if none was paid

Date loan was made in 2008–09 if applicable

Date loan was discharged in 2008–09 if applicable

Cash equivalent of loans after deducting any interest paid by the borrower

Private medical treatment or insurance

Private medical treatment or insurance

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

Services supplied to the employee

Description of asset

Description of other items

Description of other items

Income tax paid but not deducted from director’s remuneration

Expenses payments made to, or on behalf of, the employee

Travelling and subsistence payments (except mileage allowance payments for employee’s own car - see section E)

Entertainment (trading organisations read P11D Guide and thenenter a tick or a cross as appropriate here)

General expenses allowance for business travel

Payments for use of home telephone

Non-qualifying relocation expenses (those not shown in sections J or M)

Description of other expenses

Total cash equivalent of all vans made available in 2008–09

Total cash equivalent of fuel for all vans made available in 2008–09

9 £

10 £

15 £ 15 £

11 £

15 £

15 £

13 £

15 £

15 £

15 £

16 £

16 £

16 £

16 £

16 £

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.

1.

2.

3.

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.

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

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 £75.00 and £85 designer

frames. £15 VAT is recovered by Fictitious Ltd.

What value should you report at year end? Nil £27.50 £137.50 £187.50 (b) What value would be reported if Fictitious Ltd did not have a dispensation as described above? Nil £102.50 £187.50 £202.50 (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?

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? £250 £750 £1,000 £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.

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 2008. 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? £137.50 £431.25 £500.00 £569.75 (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

27

Note: You may use this page for your workings.

QCF qualification codes Level 3 Certificate in Payroll Administration – 50042658 Unit number (CYE) – Y/101/8093 © Association of Accounting Technicians (AAT) 12.09 140 Aldersgate Street, London EC1A 4HY, UK t: 0845 863 0800 (UK) +44 (0)20 7397 3000 (non-UK) e:[email protected] w: aat.org.uk

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