Question

Taxes are an integral part of any economy and are one of the major revenue generating avenues for the government of the country. The western world has devised a system by which individuals need to pay tax on incomes that they carn in the coonomy. The UK is no exception and has a very strong tax law which is enforced upon its citirens. You are an ACCA qualified individual who is working with PWC, a company comprising the BIG FOUR and known worldwide for providing assurance, tax, consulting and advisory services to its clients. Your friend has directed and called upon you to advise and help Mr Pete, a British national in computing his income from employment for the year 2018-19. On demand Mr Pete furnishes details with regards to his employment. He is employed with Sainsbury plc. and draws a monthly remuneration of £ 9000. As he is employed in a place away from his native city, the employer has provided him with Living accommodation, cost of which is £65,000 and the annual value is £4,250. Energy costs are a major area of concern in Britain and hence the company policy is to provide the employee with electricity and other maintenance charges Company paid an electricity bill of £600, a gas bill of £150, a gardener's bill of £1100 in the current year. They also require Pete makes a monthly contribution of £ 60 for his accommodation and other bills Pete was provided with a beneficial loan of £ 50,000@ 1% per annum by the employer on 06/06 2018. He repaid E 15,000 on 05/12/2018. The balance amount is still outstanding at the end of the tax year. ORI is 2.5%. He was also given a laptop and mobile phone for £1250 and £350 respectively for private use by the employer. The laptop was rented and the employer pays a rent of £ 150 p.a. His employer purchased a microwave for his use on 30 August 2017 costing £400. On 6 April 2018, the employer gifted the microwave to Pete (its market value then being £150). The benefit already accessed on the microwave amounts to £60. Pete wants to lead a peaceful life post retirement and hence contributes 1.5% of his gross remuneration during the year into the company's HMRC registered pension scheme. He also contributed £180 under the payroll deduction scheme. His job requires him to be abreast with the latest trends and hence he requires a lot of reading to be done. In this context he also paid monthly subscription of £ 30 for 8 months during the tax year to an approved professional journal.