You have recently been appointed an apprentice, your manager has given you the following scenario to review and provide advice to the client. Rajah is a UK resident with different sources of income. He works part-time as an IT consultant for a small number of clients, on a project management basis. A separate contract is drawn up for each project, specifying the deadline, expected output and the fee to be paid. Rajah uses his own laptop when necessary and works from home most of the time. Rajah also works two days a week for a nearby local hospital. He is given an office at the hospital, where he is required to be present between 8 a.m. and 6 p.m. In addition, the hospital provides 10 fully paid days off in the year and allows Rajah to invoice the hospital for the days even when he is sick. Rajah’s wife Amandeep is a hygienist working in the local dentist's practice. Amandeep joined the practice on 6 July 2022. Her gross pay for the year is £59,080 and income tax of £17,950 was deducted via PAYE. Amandeep was provided with a Toyota hybrid electric company car on 6 July 2022. The car has a list price of £30,000, an official CO2 emission rate of 29 grams per kilometre and an electric range of 129 miles. On 6 October 2022, she was provided with a diesel-powered Mercedes with a list price of £32,800, an official emission of 96 grams per kilometre. The car meets the RDE2 standard. On 6 August 2022, the practice lent Amandeep £27,000 at an interest rate of 0.5% p.a. Amandeep repaid £18,000 of the loan on 6 March 2023. Her employer paid for all the running costs of both cars, but Amandeep contributed £150 per month for the private use of the Mercedes car. She reimbursed her employer for all of the private fuel used by the Toyota (but not the Mercedes car). Amandeep is also provided with a mobile phone and is allowed to use this for both business and private calls. The practice did not have to pay for the telephone itself but paid the call charges of £ 391 during the year of which £128 related to private calls. On 6 January 2022, the dentist practice lent Amandeep £26,000 The full amount of the loan (which carried interest at a rate of 1.5% a year) was outstanding on 6 April 2022. Amandeep repaid £8,000 of the loan on 1 July 2022 and paid interest to her employer of £250. Amandeep's other income for 2022-23 consisted of gross pay from her previous employer of £17,662(PAYE £3,210), dividends received of £4300 and ISA interest of £24 Rajah also has the following income for the year 2022/23. Rajah’s income after deducting allowable expenses £88,500. He also paid PAYE of 7,250. Rajah on his current working patterns, whether he will be classified as employed or self-employed in both jobs. Review each job separately. Using journals, ACCA articles and case law advice. You should confine your answer to the information given in the question
You have recently been appointed an apprentice, your manager has given you the following
scenario to review and provide advice to the client.
Rajah is a UK resident with different sources of income. He works part-time as an IT consultant for
a small number of clients, on a project management basis. A separate contract is drawn up for
each project, specifying the deadline, expected output and the fee to be paid. Rajah uses his own
laptop when necessary and works from home most of the time.
Rajah also works two days a week for a nearby local hospital. He is given an office at the hospital,
where he is required to be present between 8 a.m. and 6 p.m. In addition, the hospital provides 10
fully paid days off in the year and allows Rajah to invoice the hospital for the days even when he is
sick.
Rajah’s wife Amandeep is a hygienist working in the local dentist's practice. Amandeep joined the
practice on 6 July 2022. Her gross pay for the year is £59,080 and income tax of £17,950 was
deducted via PAYE.
Amandeep was provided with a Toyota hybrid electric company car on 6 July 2022. The car has a
list price of £30,000, an official CO2 emission rate of 29 grams per kilometre and an electric range
of 129 miles.
On 6 October 2022, she was provided with a diesel-powered Mercedes with a list price of £32,800,
an official emission of 96 grams per kilometre. The car meets the RDE2 standard.
On 6 August 2022, the practice lent Amandeep £27,000 at an interest rate of 0.5% p.a. Amandeep
repaid £18,000 of the loan on 6 March 2023.
Her employer paid for all the running costs of both cars, but Amandeep contributed £150 per
month for the private use of the Mercedes car. She reimbursed her employer for all of the private
fuel used by the Toyota (but not the Mercedes car).
Amandeep is also provided with a mobile phone and is allowed to use this for both business and
private calls. The practice did not have to pay for the telephone itself but paid the call charges of £
391 during the year of which £128 related to private calls.
On 6 January 2022, the dentist practice lent Amandeep £26,000 The full amount of the loan
(which carried interest at a rate of 1.5% a year) was outstanding on 6 April 2022. Amandeep
repaid £8,000 of the loan on 1 July 2022 and paid interest to her employer of £250.
Amandeep's other income for 2022-23 consisted of gross pay from her previous employer of
£17,662(PAYE £3,210), dividends received of £4300 and ISA interest of £24
Rajah also has the following income for the year 2022/23. Rajah’s income after deducting
allowable expenses £88,500. He also paid PAYE of 7,250.
Rajah on his current working patterns, whether he will be classified as
employed or self-employed in both jobs. Review each job separately. Using
journals, ACCA articles and case law advice. You should confine your
answer to the information given in the question
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yes, calulate the benefit in kind and loans using both methods fot the above , using official rate of 2% for
2022
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