1. Tax system Flashcards

1
Q

What is the main difference between tax avoidance and tax evasion?

What are the two most common forms of tax evasion?

A

Tax avoidance is a legal means of reducing tax

WHEREAS

tax evasion is illegally reducing tax.

Tax evasion is most commonly done by:

a) omitting information
b) submitting false information

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2
Q

What are the components of the ACCA Professional Code of Ethics and Conduct? (5)

A
  • Integrity
  • Objectivity
  • Confidentiality
  • Professional competence and due care
  • Professional behaviour
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3
Q

In which ways does the EU influence UK Tax? (4)

A
  • Directives
  • Trade barriers
  • VAT policies
  • EU Courts
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4
Q

What should a tax agent do when they discover a tax irregularity? (4)

A
  • Determine if deliberate or mistake
  • Discuss with client error and punishment if not declared to HMRC.
  • If client refuses to fully disclose to HMRC, agent must cease working for them and inform HMRC (can’t tell HMRC why because of disclosure)
  • Check money laundering legislation for further action needed.
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5
Q

Explain the money laundering regulations (3)

A
  • Relates to offences hiding criminal money
  • Money Laundering Reporting Officer decided if should be reported to National Crime Agency
  • Cannot tell client: known as tipping off.
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6
Q

Explain the punishments for dishonest tax agents (2)

A
  • Fines up to £50,000

- Penalty above £5,000 - HMRC can publish court reports.

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