ACC3140 Week 4

Exercises to be completed in advance of seminar in Week 5

1. The basis of assessment for 2011/12 is the accounting period ended 31 October
2011.

2. 2010/11: 3/12 x 24,000 = 6,000

2011/12: 24,000
Overlap profits: 6,000

3. 2010/11: 3/6 x 6,000 = 3,000

2011/12: 6,000 + 6/12 x 36,000 = 24,000
2012/13 36,000
Overlap profits: 3,000 + 18,000 = 21,000

Exercise to be completed during the seminar held in week 5

Q1
Year
2006/07

Basis
Actual

Basis period

Workings

1Oct 06 5 April 07

6/7 x 3,500

Trading income
3,000

2007/08 First 12 mo. 1 Oct 06 to 30 Sept 07 3,500+ 5/12x 6,480

6,200

2008/09

CY

y/e 30 April 2008

6,480

2009/10

CY

y/e 30 April 2009

7,700

2010/11

CY

y/e 30 April 2010

7,900

2011/12

1 May 2010 to 31 Jan 2012 8,200 +7,300

Overlap profits:
1 Oct 2006 to 5 April 2007
1 May 2007 to 30 Sept 2007

15,500
(3,000)
(2,700)
9,800

Eva
(1)&(2)
Year
2009/10

Basis
Actual

Basis period
1Jan 10 5 April 10

Workings
3/6 x 12,000

Trading income
6,000

2010/11 First 12 mo. 1 Jan 10 - 31 Dec 10 12,000+ 6/12x 14,000

19,000

2011/12

CY

y/e 30 Jun 2011

14,000

2012/13

CY

y/e 30 Jun 2012

NIL

2013/14

CY

y/e 30 Jun 2013

13,000

2014/15

CY

y/e 30 Jun 2014

24,000

2015/16

1 Jul 14 to 30 Sep 15 16,000 +7,000

Overlap profits:
1 Jan 2010 to 5 April 2010 (3/6 x 12,000)
1 Jul 2010 to 31 Dec 2010

23,000
(6,000)
(7,000)
10,000

(3)
2013/14

y/e 30 June 2013

Losses b/f

13,000
(13,000)
NIL

2014/15

y/e 30 June 2014

Losses b/f

24,000
(24,000)
NIL

2015/16

1 July 2014 to 30 Sept 2015

Losses b/f

10,000
(2,000)
8,000

(4) Losses for the year ended 30 June 2012 can be offset against income of 2012/13 and/or
2011/12. There is no income for 2012/13, so a sideways relief claim is made against income
of 2011/12.
2011/12

y/e 30 June 2011

Sideways relief

14,000
(14,000)
NIL

The loss carried forward is 25,000.

Since the loss is incurred in the fourth year of trading, sideways relief is extended to three
years. Therefore the loss of 25,000 is available to set off against the 6,000 profit in
2009/10 and any salary received in 2009/10. There is insufficient detail to enable a decision
to be made.
(5) Assuming that the termination payment is non-contractual, Eva would be entitled to an
exemption for the first 30,000 leaving 20,000 taxable. A claim would therefore be made to
carry back the 25,000 loss and set against the 6,000 profit, and 20,000 termination
payment and any salary for 2009/10.

Exercise to be completed after the seminar held in week 5

Anna
2010-11

3/12 x 36,000

2011-12

9,000
36,000

Brian
2010-11

6/9 x 7,000

4,667

2011-12 7,000 + 3/12 x 31,000

14,750

2012-13

31,000

Overlap profits:
1.10.10 - 5.4.11
1.7.11 - 30.9.12

4,667
7,750
12,417

Sharon
2010 - 11

17,000

2011 - 12 8,000 + 4,600

overlap relief

12,600
(4,200)
8,400

Week 4 Practice questions

Question 2
Robin
2009-10
2010-11
2011-12

6/7 x 16,000 = 13,714

16,000 + 5/12 x 28,000 = 27,667
28,000

Belinda
2010-11 profit
2011-12 profit

Hamish
2010-11

23,000
14,000
(4,000)
10,000
NIL

(b) Overlap profits of 13,714 + 5/12 x 28,000 = 25,381

(c) Carry back of losses for three years.
Set against any other income including employment income
Show computation, carrying back to the earliest period first.
Refund of tax paid under PAYE
Question 3
(a)
Darwen
2011/12 9/12 x 24,000 = 18,000
2012/13 24,000
Nadia
2011/12 11,400 + 3/12 x 30,000 = 18,900
2012/13 30,000
Philip
2011/12 12,600 + 1,200 3,200 = 10,600
(b)
3/12 x 30,000 = 7,500 utilised on cessation or change of accounting date
(c)
Class 2 9/12 x 52 x 2.50 = 97.50
Class 4 (18,000 7,225) x 9% = 969.75
Total NIC payable for 2011/12 = 97.50 + 969.75 = 1,067.25