Question 1

Section A

Dr. Aris, a marine biologist, is provided with a petrol company car by his employer. The car has a list price of £28,000 and CO2 emissions of 115g/km. The employer also pays for all private fuel.

What is the Class 1A National Insurance Contribution (NIC) payable by the employer for the tax year 2023/24? (Assume a Class 1A rate of 13.8% and the relevant CO2 percentage is 28%).

Accepted Answer

Calculate the car benefit (List price x CO2%) and the fuel benefit (Fixed multiplier £27,800 x CO2%). Add them together and multiply by the Class 1A NIC rate of 13.8%.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Forgetting to include the fuel benefit, or applying the 13.8% rate to the list price instead of the benefit value.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 3

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