BUSINESS LAW 2

LARGE GROUP 11
Student Guide

Consolidation

Context

In this Large Group you will start to consolidate your knowledge of the Business Law
2 Module. You will review the topics that you covered in the Module. You will then be
introduced to the format of the Business Law 2 assessment and given some advice
on how to approach the assessment.

Outcomes

By the end of this Large Group you should be able to:

1. Describe the format of the Business Law 2 assessment.

2. Understand the approach to answering the following question-types:, essay,

problem and part-essay part-problem.

1. Introduction

2. A Review of the Business Law 2 Module

3. The Assessment

710847006.docx 61 © The University of Law Limited

3.1 Written Questions

3.2 Essay Questions

Activity 2

“Fair taxes are always what people wealthier than us should pay.”

David Aaronovitch
The Times,
9 July 2015

Compared to companies are sole traders treated unfairly in the calculation

and taxation of their trading profits?

© The University of Law Limited 62 710847006.docx

3.3 Problem Questions

Activity 2

Charlie runs a flower shop as a sole trader. He estimates that thee annual accounts
of the business accounting period ending 5 April 2022 will show the following:

£
Sales 110,000
Rent 20,000
Stock 15,000
Utility bills 5,000
Employee’s wages 10,000

Apart from the business, Charlie’s only other income is in the form of dividends on his
shares in various public companies. In the tax year 2021/22 Charlie will receive
£4,000 in dividends.

Explain how much income tax Charlie must pay for the tax year ending 5 April 2022
assuming that Charlie’s estimates are correct.

NOTE: You should assume that all tax rates, reliefs, exemptions, bands and
allowances for present, past and future years are the same as for the tax year
2021/22.

Summary of main rates and allowances for 2021/22:

Income tax

Rates: Personal Allowance £12,570

Income (except savings and Personal Saving Allowance
dividend income) – basic rate taxpayer £1,000
– basic rate (£1–37,700) 20% – higher rate taxpayer £500
– higher rate (£37,701–150,000) 40% – additional rate taxpayer Nil
– additional rate (above £150,000) 45% Dividend Allowance £2,000
Savings income
– basic rate 20%
– higher rate 40%
– additional rate 45%
Dividend income
– basic rate 7.5%
– higher rate band 32.5%
– additional rate 38.1%

710847006.docx 63 © The University of Law Limited

 This page is provided for you to make notes

© The University of Law Limited 64 710847006.docx

 This page is provided for you to make notes

710847006.docx 65 © The University of Law Limited

 This page is provided for you to make notes

© The University of Law Limited 66 710847006.docx