Question 1

Section A

An environmental NGO provides its director with a zero-emission electric company car. The list price of the car is £40,000. The NGO also pays for the installation of a charging point at the director's home costing £1,200. What is the Class 1A National Insurance Contribution (NIC) liability for the NGO regarding these benefits for the 2023/24 tax year? (Assume the appropriate percentage for a zero-emission car is 2% and Class 1A rate is 13.8%).

Accepted Answer

Calculate the taxable benefit of the car. Determine if the charging point is taxable. Apply the Class 1A NIC rate to the total taxable benefits.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Including the £1,200 charging point installation as a taxable benefit.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 4

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