FIN5006D British Taxation Assessment Brief 2026 | Arden University

FIN5006D Assignment Brief

As part of the formal assessment for the programme, you are required to submit a British Taxation Time Constrained Assessment (TCA). Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.

Learning Outcomes

After completing the module, you should be able to:

• Display a detailed understanding of the scope of the UK tax system
• Explain and compute chargeable gains and inheritance tax liabilities
• Understand and explain VAT implications to corporations and individuals
• Compute Income tax liabilities for individuals and corporations
• Produce Complex Computations Reflecting Current UK Tax Legislation

Guidance 

Your assignment should include: a title page containing your student number, the module name, the submission deadline and the exact word count of your submitted document; the appendices if relevant; and a reference list in (see referencing section for more information). You should address all the elements of the assignment task listed below. Please note that tutors will use the assessment criteria set out below in assessing your work.

You must not include your name in your submission because Arden University operates anonymous marking, which means that markers should not be aware of the identity of the student. However, please do not forget to include your STU number.

Assessment Instructions

This assessment should take you no longer than 4 hours and can be completed at any point during the 24-hour window. Please ensure you give yourself adequate time to upload your completed paper to Turnitin.

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FIN5006D Assessment Questions

Section 1 (40 marks)

Hannah is a Tax Senior working for the prestigious tax advisers ‘Arden Taxation UK Ltd.Hannah is going to have a meeting with one of its clients, Jonathan Matteo. She knows that he is now working as an associate lecturer at Arden University, and he is going to ask Hannah for tax advice. Jonathan sent in advance the following documents for Hannah to analyse before the meeting:

• The letter from Arden University with the terms and conditions of the contract
• The bank statement covering 1 April 2022 to 30 March 2023

Letter from Jonathan Matteo from Arden University

15 February 2022

Dear Jonathan,

We have the great pleasure in offering you the full-time post as Associate Lecturer at the School of Finance at Arden University commencing on 1 May 2022.

Your remuneration package from your date of commencement will include a salary of£42,000 per annum, the full use of a diesel Ford car which the company purchased in January 2022 for £16,000 (CO2 emissions 128g/km, list price £17,500). The company will also pay for 90% of all fuel costs, a mobile phone (value capped at £150) and computerfor your home use (value capped at £1,700).

You will also be part of the company’s bonus scheme through which a bonus will be paid in February.

Finally, I understand from our HR department that you would like to contribute 6% of your basic salary to our HMRC-registered company pension scheme, which will be matched by a6% contribution by Arden University.

We look forward to welcoming you to our team. Yours sincerely

Mr Enrico
Director of the School

Question 1 ( marks) 

1.1- Jonathan took the company car offered by Arden University and contributed £550towards the cost of fuel. In addition, Jonathan took full advantage of the other benefitsoffered and chose a mobile phone (retail price of £145) and a laptop (retail price £1,500).

Required: What is the total benefit in kind that will appear on Jonathan’s P11D for 2022/23 in respect of these benefits? (6 marks)

1.2- Taking into consideration pensions and benefits, what is Jonathan’s total employment income for the 2022/23 tax year (assuming his bonus has not had PAYE deducted)? (4 marks)

1.3- Jonathan would like you to explain in full any tax advantage he would get from increasing his pension contributions, and if there is a cap on the amount he can contribute. (4 marks)

1.4- In 2022, Jonathan made a few bulk eBay purchases of vinyl records, which he sold in December for a small profit. He is worried because at a party, one of his friends said he thought Jonathan would have to pay tax on any profit he makes.

Required: Referring to two ‘Badges of Trade’, explain the comment made by  Jonathan’s friend and challenge why it may not be correct.(4 marks)

1.5- Jonathan would like to know if he is deemed to be carrying on a trade with his vinyl record sales, what will happen if the trade makes a loss in 2022/23, how the loss will be treated for tax purposes, and how he will get relief for any losses?(4 marks)

1.6 Jonathan owns 10 shares in B Sky B, which have paid two dividends during the year. Jonathan would like you to briefly explain how dividends are taxed in the UK and why they are treated differently from other forms of income. (4 marks)

1.7- Using Jonathan’s donation to Comic Relief as an example, explain to Jonathan how he will receive tax relief for this gift aid donation and the benefit to the charity Comic Relief. (4 marks)

1.8- Jonathan tells you he has paid £8,700 tax through PAYE and asks you to calculate any additional income tax he must pay for 2022/23.

Required: Using all the information included in the documents provided, and any points already discussed, calculate the additional income tax payable for 2022/23. (8 marks)

(Your calculations should be on the basis that you determined that Jonathan was not carrying on trade with his vinyl eBay sales.)

1.9-What is the deadline for Jonathan to electronically file his personal tax return, and before what date must he pay any additional tax due? (2 marks)

Section 2 (60 marks) 

The City Limited is a UK trading company. The company usually draws its accounts to the period 30 September, but runs a long period of accounts from 1 October 2021 to 31 January 2023.

The City Limited: Income statement for the period ended 31 January 2023

Notes:1.

The dividends relate to two separate dividends received:•

• £90,000 dividend was from Lisbonnete Limited on 6 February 2022. Lisbonnete Limited was a wholly owned subsidiary of The City Limited until 10th March 2022 (see Note 8)•
• £18,000 dividend on 1 January 2023 from Rule Limited, an unconnected company.

2. Bank interest on all receivable, on short-term deposits accrued during the nine months to 30 June 2022.

3. On 25 April 2022 The City received proceeds of £250,000 for the sale of a warehouse which had been used for trading purposes. The original warehouse cost £25,000 when it was first acquired in December 1978 and was valued at £55,000 in March 1982. The sale was due to the company downsizing, and the City bought a smaller replacement warehouse in October 2021 for £200,000.

4. Remuneration includes directors’ bonuses of £100,000, the amount being agreed in principle at a directors’ meeting in January 2023 and expected to be paid in July 2023.

5. Royalties are a charge for patent royalties, payable to other UK companies. Of the amount shown, £60,000 was due and was paid during this period; an amount of £40,000due for payment on 25 January 2023 was actually paid on 12 February 2023. The licensed patents relate to a process that is integral to the company’s trade.

6.  The directors have noted that they think that all the miscellaneous expenses should be allowable for tax purposes. It includes £15,000 for the costs of renting an executive box at the local horse racing track – the executive box is usually used to put on events involving clients, suppliers, and prospective clients – the catering and associated costs of these events were £18,000 during the year (in addition to the basic rental). The company also pays for the annual staff Christmas party – this cost (of £7,000) for around 70 staff and guests in total was also charged here.

7. Repairs and renewals include the costs of repairing the roof of a storage shed that was damaged during the year -£25,000, and replacing the old windows in the company’s factory unit with new double-glazed units – £40,000. The remainder of the expense comprises numerous small items, all under £250.

8. On 10 March 2022 The City sold its 100% investment in Lisbonnete Limited for £20,000. The expenses associated with the sale amounted to £5,000, and the original cost of the shares (in July 1992) was £80,000. Lisbonnete Limited was an active trading company throughout the period that it was owned by The City Limited.

9. In 1994, the company issued £50,000 of debentures to unconnected individuals to finance the purchase of the Lisbonnete shares; the debentures are yet to be repaid to investors. Debenture interest of 7.5% accrues evenly over the period and is normally paid on 31 July and 31 January each year. The 31 January 2023 payment was actually paid on 3 February 2023, due to a clerical error. All other interest is servicing loans taken out for trading purposes.

10. Mr Norman owns 35% of The City Limited and is the Managing Director. The remaining65% of the issued shares are owned by Matilda, Mr Norman’s wife, who is not a director and takes no active part in the management of The City Limited. Matilda owns 55% of the issued shares in another UK company, Black Swan Limited, which carries on a trade in an unrelated business.

11.  The tax written down value at 1 October 2021 of The City’s two capital allowance poolswere: Special Rate Pool £8,000, Main Pool £60,000.

12. The City Limited has tax losses brought forward at 1 October 2021 of:

• Non-trading loan relationship loss £19,000
• Capital loss £30,000

13. In July 2024, The City Limited intends to purchase two newly registered petrol motorcars for use by Mr Norman and his wife, Matilda. The two cars will be identical Mercedes cars, with manufacturer’s list prices of £55,000 and CO2emissions of 92g/km

Mr Norman intends to undertake 12,000 business miles a year in his car with a total mileage of 18,000 miles. His wife is likely to drive 10,000 miles a year, none of which will relate to The City’s business.

Required

2.1- Based on the information provided, for the accounting period ended 31 January 2023:

Using the information provided in points ‘3’ and ‘8’, calculate the net chargeable gain arising on the disposal of the freehold warehouse and shares in The City Limited, on the basis that any reliefs available are claimed. (6 marks)

2.2- Explain the treatment of The City’s loan relationships, including the non-trade loan relationship credits brought forward. (6 marks)

2.3-Calculate the Corporation Tax payable by The City Limited and specify the dates the tax must be paid and the CT600 return(s) must be filed with HMRC. (20 marks)

2.4-Briefly identify the main taxation consequences of the provision of the facilities described at Note 6. (4 marks)

2.5-Briefly explain the taxation consequences for The City Limited, Mr Norman and his wife of the company providing them with Mercedes motor cars and provide them with one piece of tax advice in relation to the cars. A detailed computation for this part is not required. (4 marks)

Section 3 (20 marks)

3.1) Thames Water Ltd is registered for VAT and is in the process of completing its VAT return for the quarter ended 31 March 2023. The following information is available, and unless otherwise stated, all the above figures are exclusive of VAT:

i. Sales invoices totalling £128,000 were issued in respect of standard ratedsales. Thames Water Ltd offers its customers a 2.5% discount for promptpayment, 50% of customers pay early enough to receive this discount.

ii. Standard-rated expenses amounted to £74,800. This includes £4,200 forentertaining customers.

Required: Calculate Thames Water VAT liability for the quarter ended 31 March 2023. State the date the VAT would be payable to HMRC and the date by which the VAT100return must be filed. (7 marks)

3.2)Early in February 2022, Vera was told that she would be made redundant. This happened on 6 April 2022. The severance package that she received in 2022/23 was:

• Statutory redundancy £4,000
• Non-statutory redundancy, ex gratia £20,000
• Signing a non-disclosure/non-competition agreement £10,000

Required: Outline the tax treatment of the redundancy package and explain how the tax liability on the redundancy package could have been reduced if the £34,000 had been split differently. (7 marks)

3.3) You work for the Chartered Accountancy firm Bevan&Bevan Ltd, which has, for many years, been engaged to perform accounting and corporation tax work. Currently, you have discovered that some practices are incorrect, and some behaviours could even be label astax evasion.

Required: Explain the code of conduct and its importance for preventing such behaviours and actions that could be taken. (6 marks)

Assessment Criteria (Learning Objectives Covered-all)