Problem
As a trainee accountant you have been asked at advice Anne Marie on the following tax matter: 6 Anne Marie is a UK resident, and is employed by a Delta Ltd as a project manager and is paid a salary of £36,000 pa. She contributes 5% of gross salary into HMRC's approved pension scheme. Anne Marie will be provided with a motor car for both business and private motoring on 6th April 2021, a BMW with a list price of £32,800, emission is 96g/km. Fuel is petrol. Her employer will pay for all the running cost. She reimbursed her employer for all the all her private fuel. As alternatively, the company has offered Anne Marie to work for the company on a self-employed basis. The details proposed to her for the year ended 5th April 2022 are as follows:
• Assuming, Anne Marie will commence being self-employed on 6th April 2021
• Her income from Delta Ltd is expected to be £58,000
• When not working for Delta Ltd, Anne Marie will be allowed to work for other clients.
• Anne Marie will lease a delivery van for her role and 100% mileage will be for business purposes. The cost of leasing and running the delivery van will £4,400
• When she is unavailable, Anne Marie will have to provide a replacement to do the job at Delta Ltd. This will cost £2,800
Task
A. Assuming, that Anne Marie does not accept the offer from Delta Ltd and continues to be employed by the company, compute her income tax and Class 1 and Nic obligation and state when and how they must be paid
B. Assuming Anne Marie accepts the offer to work for Delta Ltd on a self-employed basis from 6th April 2021, compute her income tax liability, class2 and Class 4 NIC obligations for 2021/22 state when and how they must be paid
C. Advice Anne Marie as to whether it will be beneficiary for work for Delta Ltd on a self-employed basis - Your answer must be supported by a calculation of the amount by which her income for 2021/22 will vary if she accepts the offer. A critical evaluation of self-employment
D. Critically comment on whether Anne Marie would be considers an employee or self-employed under current HMRC rules - supported by case law
E. If self-employed, explain to Anne Marie, the filing obligations, and implications of non-compliance
F. Conclusion and Recommendations
G. Presentation style and format, Professionalism.