Taxation

Taxation
By
Name (Author)
Professor
Course
City, State
Date

The report present the impacts of the national insurance for the period between 2019 and 2020 in relation to Veras business. For the individuals who are employed, tax and national insurance payments are individual responsibilities.
Self employed pays for the national insurance contributions coverying the state pension as well as universal credit. Workers annual salaries that covers cut for national insurance has significantly increased following the new 2019/20 regulations. For the individuals who were paying ¢6,205 in 2018/2019 are now paying ¢8,632 following the 2019/20 8 percent tax increase. In association to Veras business and employment with Hems plc., there no tax on ¢11,850 earnings that the worker belong (employment class). However, the increase in the national insurance pay that employees pay by 8 percent account for the increase in the amoun of taxation in 2019/20. For the business with profit greater than ¢9500, the class four tax NICs applies.national insurance consequences for 2019/20.

Your firm represents Vera Tsang, a freelance fashion designer who has run her own unincorporated business “Gowns on the Town” since 1999. She decided to cease trading on 30 November 2019 and accepted an appointment as a director with Hems plc from 1 December 2019. The following information has been provided to you:
Gowns on the Town
Vera prepares her accounts to 30 June each year. Her recent adjusted trading profits are as follows:
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
Period ended 30 November 2019 (draft)
Note 1:
£ 90,850 60,700 35,800
Note 1 20,760
Vera calculated her adjusted trading profit as £20,760, but this is before capital allowances. Vera has provided the following information for the period ended 30 November 2019:
TWDV of the main pool @ 1 July 2019
TWDV of Vera’s car @ 1 July 2019 (used 60% for business purposes)
£ 5,900 8,760
All remaining equipment that Vera used in her business was scrapped for no proceeds on 13 November 2019. She also sold her car on 15 November 2019 for £9,300.
Vera has overlap profits from commencement of £2,780.
Remuneration package from Hems plc:
Annual salary: £51,000
Company car: A petrol fuelled car with a list price of £30,000 and CO2 emissions of 142 g/km. The car is provided from 1 January 2020, following Vera’s probationary period. All of Vera’s business fuel will be reimbursed, but none of her private fuel. Vera estimates that she will use the car 40% for private purposes. Unfortunately on 31 January 2020, Vera collided with another car in the company car park (she was provided with a free parking space there) and Hems plc paid repairs to her car which cost £1,300.
Private health insurance: The cost of the insurance to Hems plc is £1,900 for 2019/20. As a result of her car crash, Vera had treatment for whiplash injuries which cost the insurance company £2,100 in February 2020.

You are required to:
Explain, with supporting calculations, the national insurance consequences for 2019/20 with regard to Vera’s business and her employment with Hems plc. (15 marks)