The Questions on the PDF

30% INSTRUCTIONS  The rules of academic ethics apply when taking this exam, including the requirements that you take this exam without improper or unauthorized assistance from anyone.

Coursework: The brief:

The present assignment counts as 30% of the overall mark for the module and as such should be given the appropriate commitment of time and effort. It is expected to see the following: references of reading : You are expected to spend time reading a number of relevant sources, such as the published official guidelines from the HMRC website and the relevant sections of the statute law (e.g. Income Tax Act, Capital Allowances Act). Submissions that do not meet this standard will not be able to achieve a good mark.

– Evidences of critical analysis : It is insufficient simply to summarize your arguments.

You must analyze the material and use it to structure a report that will be addressed to the taxpayer. Through such analysis you can demonstrate critical engagement with the material.

– A high standard of writing and referencing : You can ask why this is important, since the purpose of the present assignment is to explore your understanding and not to test your writing skills. This is not exactly true. The focus of the coursework assessment is on your ability to analyse, present and discuss tax issues to a taxpayer with no prior knowledge of taxation. This is why writing and presenting the report is very important.

Please note:

 Plagiarism is an offense . Please refer to your student handbook for information regardingthe rules on this matter. It is students’ responsibility to be aware and adhere to the rules.

 Submission Deadline: Assignments should be submitted no later than 11/12/2020. According to the regulatory framework, late submission up to seven (7) days, will result in a cap-C grade. Beyond the seven days the student’s grade is Fail (F).

Page 2 of 5Assessment Method Each student should adhere to the following technical requirements:

a. Documentation – APA style; a guide is available at: http://www.acg.edu/sites/default/files/pdfs/APA%20Basic%20Citation%20Guide.pdf b. Word length –1.000 up to 1.400 words; it is compulsory to report the number ofwords at the end of the paper.

c. Submission – The project must be word processed, and each student will submit the project electronically and in paper copy.

d. Workings – Full marks are not necessarily awarded for a correct answer with no working. Answers must be supported by working and explanation where required. Where an answer is incorrect, some marks may be given for a correct method, provided this is shown by written working. You are therefore advised to show all working. Calculations and workings need only to be made to the nearest £.

Turnitin – Each student must submit electronically the major written project to Turnitin before the submission to the academic staff, following the Turnitin guidelines found on blackboard.

Page 3 of 5 Coursework:

James is 35 years old and owns and runs a small business, which is a shop that sells computer hardware and software equipment. James has prepared financial statements for the tax year 2020, as per the below: £ £ Sales 170,000 Minus Cost of Sales -71,000Gross Profits 9 9 , 0 00 Plus Savings received 10,000 Plus Dividends received 28 , 0 00 38,000 38,000 1 3 7 , 0 00 Minus Expenses :

Personnel’s salaries 30,0001 Office rent 1 6 , 0 00 Utility bills 5 , 00 0 Purchase of air-conditions for the shop 10,000Purchase of a van vehicle 1 5 , 0 00 2 Diesel expenses for van 3 , 00 0 Purchase of new furniture for the shop 8,000Purchase of Vauxhall Astra car 2 0 , 000 3 Petrol expenses for Vauxhall Astra 4 , 0 00 Purchase of Toyota Yaris car 12,0004 Petrol expenses for Toyota Yaris 2 , 0 00 Various expenses 30 , 0 00 5 150.000 -150.000Accounting Losses - 18 . 0 00 Notes to the accounting records of James’ business:

1.Analysis of personnel’s salaries Salary and social security contributions of 2 salesmen 20.000 Salary of Elizabeth (wife of James) 10.000Total Payroll expenses 30.000 2. Purchase of van The van has emissions of 190 gr/km.

3. Purchase of Vauxhall Astra car The car has emissions of 168 gr/km. The UK tax authorities have ruled that 50% of the car’s expenses are connected to James’ private use of the car.

Page 4 of 5 4.

Purchase of Toyota Yaris car The car has emissions of 100 gr/km. The UK tax authorities have ruled that 70% of the car’s expenses are connected to James’ private use of the car.

5. Various expenses analysis:

£ Gifts to clients (200 USB sticks) 9.000 Donation to Conservative Party 3.000 Clients’ entertainment expenses 7.000 Lawyer’s fees for personal case of James 3.500 Subscription to magazine “National Geographic” 1.000 Accountant’s fees for bookkeeping of James’ business 2.500 Subscription to local motor racing club 2.000 James’ annual subscription to a local gym 2.000TOTAL:

30.000 Tasks: James hired you as his tax consultant. He asked from you to prepare for him a short report where you will explain and analyze the following:

1.Explain to him briefly what the capital allowances are. Classify the capital allowances included in James’ accounting records and divide them into the applicable capital allowances accounts for tax year 2020.

2. Explain to him the tax deductibility of expenditure by referring to expenses that are included in his accounting books and which are either going to be recognized or not for tax purposes. Classify any disallowed expenditure included in James’ accounting records and compute James’ trading profit adjusted for tax purposes.

3. Compute James’ annual income tax for the current tax year and explain briefly to him why is he going to pay income tax (if this is the case), despite the fact that his business had accounting losses for the tax year.

Page 5 of 5 Coursework’s Evaluation Scheme CONTENT Task 1 27% Answers the set question(s) Clarity of report and explanations Correct workings Evidence of research Task 2 27% Answers the set question(s) Clarity of report and explanations Correct workings Evidence of research Task 3 26% Answers the set question(s) Clarity of report and explanations Correct workings Evidence of research STYLE 10% Fluent writing Succinct and to the point Good paragraph structure Good sentence structure TECHNICAL SKILLS 5% Correct spelling throughout Grammatically correct Effective use of figures and tables Correct citation of references (Turnitin rate) COURSEWORK PRESENTATION 5% Well planned and tidy Within the word limit 100% TOTAL