6 - Tax Compliance And Self Assessment

Question 1

What class of NIC does self employed and PAYE pay?

Answer 1

Self employed - Class 4

PAYE - Class 1

Question 2

Key self assessment deadline dates

Answer 2

Tax returns issued by HMRC - 6th April

Deadline for submitting return on paper - October 5th

Deadline for submitting return online if want underpayment - December 30th

Deadline for submitting return online & first payment- Jan 31st

Second payment - July 31st

Question 3

What if a tax payer knows they will overpaying on their self assessment payment?

Answer 3

Can claim a reduction in payment

Question 4

What is Carry back tax relief on self assessment?

Answer 4

Tax relief for personal pension payments and given as a repayment in same tax yr claim arises

Question 5

Penalty for unpaid tax

Answer 5

5% on unpaid tax for when over 30 days balance due

Further 5% after 5 more months

Further 5% after 6 more months

Question 6

Penalty for late return of self assessment

Answer 6

Fixed penalty of 100

If more than 3 months late, daily charge of £10/day for 90days

If more than 6months late then penalty is higher of £300 or 5% of outstanding tax (repeated after 12months)

Question 7

Are they charged if a reduction in a payments for self assessment turns out to be unjustified?

Answer 7

Yes

Question 8

Is someone charged for a non deliberate completion of a tax return?

Answer 8

Yes

Question 9

When can HMRC do compliance check on tax return?

Answer 9

Can be targeted or random and do not need to give a reason. Usually done within 12months of receiving tax return

Question 10

How does employer know how muchNIC to pay for client? Break this down

Answer 10

Each client given a PAYE code
Letter - type of personal allowance
Number - amount of tax free income

Question 11

What is 1 rules for real time information for employer regarding NIC

Answer 11

Send NIC information to HMRC online every time employee is paid

Question 12

Who’s responsible for sorting PAYE NIC?

Answer 12

Employer

Question 13

What dates do a tax month run from and to?

Answer 13

From 6th to 5th

Question 14

When must employer have paid NIC by each month for lapsed based and electronically?

Answer 14

22nd electronically or 19th paper based

Question 15

What is the purpose of the affluent compliance team?

Answer 15

Targets investigations to 200,000 richest British tax payers

Question 16

Disclosure of tax avoidance scheme

Answer 16

Firms in the UK who market tax avoidance schemes must register them with HMRC first

Question 17

HMRC general anti abuse rule for tax avoidance

Answer 17

Applies to abusive tax arrangements entered into on or after July 2013 - Main aim is to plug tax loopholes

Question 18

Ramsey rule

Answer 18

HMRC will look at effect of whole series of tax avoidance scheme and not the tax position of each individual step