Financial Coursework



Financial Coursework

Part 1

Phillip Brown has recently received a major promotion at work and he will now be the Financial Controller for his employer, a listed company. From 6 April 2013, Phillip will be receiving a greatly enhanced salary (see note 1) and employee benefits (paid by his employer) in his new position and now would like to know how much tax he will have to pay in the current tax year. Phillip also has other income as detailed below. The package of benefits is as follows:

Car- his own choice up to the value of £25,000 (see note 2)

Unlimited fuel for car

Phillip will also have use of a company flat (see note 3)

The company made a personal loan to Phillip to help him buy his dream yacht. (see note 4)

Other Income

In the tax year 2013/2014, Phillip also received interest on his building society account equal to 5% of his gross salary. This is the amount net of taxation. In addition he has a portfolio of investments and in the tax year 2012/2013 he received dividend income equal to 10% of his gross salary. This is the amount net of taxation. Phillip also contributes £18,000 of his salary to a personal pension plan. This is the net amount contributed to the pension plan. Phillip is entitled to the basic personal allowance.

Note 1

The workings for the calculation of all the four notes is mentioned in the attached excel fine. It is in the Second Sheet with a title “Calculations” after the Financial Coursework values. Use your date of birth to work out his salary to the nearest £. Simply reverse your date of birth and divide by ten to get Phillip Brown's annual salary. E.g. a date of birth of 22 August 1991 (22/08/91) produces a salary of £91,082 (910822/10) use my date of birth which is (29 November 1993) 29/11/93.

The calculation of the salary will be as followed:

Gross Salary

£931129

Division by 10 £931,129/10

£931,129/10

Net Annual Gross Salary £93113

£93113

Note 2

Choose a car (your personal preference) from the web for Phillip Brown's new vehicle. Give full details of make, model, list price, type of engine and CO2 emission. Print off the details of the car from the website you used. Assume Phillip took delivery of the car on 6 June 2013. The link is mentioned in the Reference Page that points towards the Details of the Car.

Note 3

Phillip moved into the company flat in Lime house on 6 May 2013. The property was purchased by his employer in 2004 for £190,000 and the company had spent £24,000 in August 2012 on improvements to the property. The property currently had a market value of £255,000 and has a rateable value of £11,500. The company provided all the furniture at a cost of £32,000.Phillip is required to pay all the utility bills for the property.

Property Calculations

 

Purchase Price

190000

Cost in the Improvements

24000

Total Costs

214000

Current Market Value of Property

255000

Rateable Value

11,500

Furniture Cost

32000

Note 4

The company lent Phillip £190,000 for personal use at 1% interest ...