(1). B There is no private use adjustment where a motor car is used by an employee, and as CO₂ emissions are over 130 grams per kilometre the motor car will be included in the special rate pool.
(2). C Where CO₂ emissions are more than 130 grams per kilometre, then 15% of a motor car’s leasing costs are disallowed. Therefore, £2,295 (2,700 less 15%) of the leasing costs is deductible.
(3). D The rate of approved mileage allowance for the first 10,000 business miles is 45p per mile, and 25p per mile thereafter. Simone’s expense claim is therefore £5,400 ((10,000 at 45p) + (3,600 at 25p)).
(4). A The relevant percentage is 20% (11% + 9% (140 – 95 = 45/5)). The motor car was only available for two months of 2013-14, so the benefit is £630 (18,900 x 20% x 2/12).
(5). B All the input VAT of £120 (720 x 20/120) for both private and business mileage can be recovered. The private use element will be accounted for by way of an output VAT scale charge.