Question 1

An employer provides an employee with a new zero-emission electric company car. The list price is £40,000. The appropriate percentage for zero-emission cars is 2%. What is the Class 1A NIC liability for the employer for the 2023/24 tax year? (Assume the Class 1A rate is 13.8%)

Accepted Answer

First calculate the taxable benefit (List Price x Appropriate Percentage). Then apply the Class 1A NIC rate (13.8%) to the taxable benefit.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Forgetting to apply the 13.8% rate and just selecting the benefit value.

An employer provides an employee with a new zero-emission electric company car. The list price is £40,000. The appropriate percentage for zero-emission cars is 2%. What is the Class 1A NIC liability for the employer for the 2023/24 tax year? (Assume the Class 1A rate is 13.8%)

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 6

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