Mercia Group Deemed Payment Calculator 2005/06 Sample pages of Excel Workbook
The following pages are extracts from an Excel Workbook. The Deemed Payment Calculator will enable you to compute accurately and efficiently the payment of PAYE and NI required by a Personal Service Company under the income tax legislation and NI regulations.
Contents 1. Deemed payment summary 2. Deemed payment entry sheet - extract 3. Computation of entries for company car and employee's car
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DP calculator 2005-06
Deemed payment summary Company 'Worker' Personal Services Ltd A Consultant
£ Step 1 Receipts in the tax year Less: 5% allowance Step 2 Add: Payments and benefits from third parties Step 3 Less: Deductible expenses: Business mileage for company car Other travelling and subsistence expenses Other expenses Step 4 Capital allowances Step 5 Employer pension contributions Step 6 Employer's NI on paid salary and benefits Step 7 Payments and benefits chargeable as employment income and not included in Step 3: Salary paid in tax year Company car benefit Fuel scale benefit Other assessable benefits Payments to charity through payroll giving scheme Business mileage deduction for employee owned car Passenger payments Deemed payment (including employer's NI) Step 8 Employer's NI Step 9 Deemed payment £ 58,000 2,900 Nil 55,100
3,200 900 Nil 800 2,000 755
6,000 4,800 Nil Nil Nil Nil Nil 18,455 36,645 4,158 £32,487
Accounting for PAYE and NI due
Employer's NI PAYE Employee's NI Payment to Inland Revenue 4,158.34 7,242.30 3,000.87 £14,401.51
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DP calculator 2005-06
Deemed payment entry sheet
Calculation of deemed payment £ Step 1 Receipts in the tax year Actual receipts from 6 April 2005 to 5 April 2006 Less: Amounts received for which work done pre-6 April 2000 Step 1 is computed on a cash receipts basis. Therefore do not include any amounts invoiced pre-6 April 2005 for which the cash has not been received by that date. See help sheet regarding transitional provisions. Receipts in the tax year Less: 5% allowance Step 2 Add: Payments and benefits from third parties Only include amounts of benefits received by the worker, or his family, from third parties which are not otherwise chargeable as employment income. Step 3 Less: Expenses: Enter the amount of any expenses met by the intermediary, which could have been claimed as expenses against employment income if the worker had been an employee of the client and had paid for them himself. Include amounts spent by the worker and reimbursed by the intermediary. All expenses in this category are deductible on a cash basis. Business mileage deduction for company car Go to company car sheet to compute the deduction allowed from the deemed payment in respect of the business miles travelled in the company car. Business mileage deduction for employee owned car This is now deductible at Step 7 (see below). Other travelling expenses re. work included in Step 1 Subsistence expenses re. work included in Step 1 Other tax deductible expenses re. work included in Step 1 List: Nil Nil Nil Capital allowances These must satisfy the same test as for revenue expenses in Step 3 i.e. does the expenditure satisfy the normal tax deduction tests? Cars are subject to a less strict test but allowance will have already been given for this in the use of IRAMR in Step 3. Step 5 Employer pension contributions A deduction is allowed for employer pension contributions which have been paid in the tax year. Step 6 Employer NI Class 1 and 1A contributions These amounts are computed by the spreadsheet. You can overwrite the formulae to put in other figures if you wish but you may need to do this on other sheets. Please refer to the help sheet to determine which cells to adjust. Employer's NI on paid salary Class 1A on car Class 1A on fuel scale charge Class 1A on other benefits 141 614 Nil Nil 2,000 800 3,200 58,000 2,900 Nil 58,000 Nil £ £
55,100
Nil 900 Nil
Step 4
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DP calculator 2005-06
Company car
Details of company car Price of car CO2 emissions Petrol or Diesel? Does the company pay for private petrol? £24,000 166 Petrol (or Euro IV diesel pre 1 Jan. 06 reg.) No
Car benefit The car benefit is: Class 1A charge: Petrol benefit The taxable benefit is: Class 1A charge: Notional expense claim Business mileage Mileage claim: Up to 10,000 Above 10,000 Car benefit Price of car Relevant percentage
£4,800 £614 Nil Nil 8,000 Rate (p) 40 25
3,200 Nil £3,200
24,000 20% £4,800
Employee's car
Business mileage Nil
Expense claim Mileage claim: Up to 10,000 Above 10,000
Rate (p) 40 25
Nil Nil Nil
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