(A) Self-Assessment Flashcards
An individual completing AN ANNUAL TAX RETURN on paper deadline?
31 October following the end of the tax year
An individual completing AN ANNUAL TAX RETURN electronically?
31 January following the end of the tax year
When must new sources of income or gains be notified to HMRC?
5 October, six months of the end of the tax year
When is the deadline for a taxpayer to correct their return?
On or before 31 January 2026 if tax year was 2023-24 (12 months following the prescribed filling date (31 January 2025)
When can HMRC correct obvious errors in taxpayer’s return?
Within 9 months of the date of receipt
Persons conducting a trade or property letting business must retain all records must retain all records for?
Five years after the filing date (31 January 2030 for 2023-24 purposes)
Persons not conducting a trade or property letting business must retain all records must retain all records for?
One year after the filing date (31 January 2026 for 2023-24 purposes)
What happens on 31 January 2024 for payment of tax? (Year 2023-24)
Make first payment on account of 2023-24 income tax/Class 4 NIC
What happens on 31 July 2024 for payment of tax? (Year 2023-24)
Make second payment on account of 2023-24 income tax/Class 4 NIC
What happens on 31 October 2024 for payment of tax? (Year 2023-24)
Submit 2023-24 tax return if filing paper return
What happens on 31 January 2025 for payment of tax? (Year 2023-24)
Make final balancing payment of 2023-24 income tax/Class 4 NIC
Make first payment on account of 2024-25 income tax/Class 4 NIC
Make only payment of 2023-24 CGT/Class 2 NIC (and balancing payment of CGT if residential property disposal)
When are no payments on account required? (Less than £1000)
The income tax payable + Class 4 NIC liability for the preceding year is LESS THAN £1,000
When are no payments on account required? (More than 80%)
More than 80% of the income tax payable + Class 4 NIC liability for the preceding year was settled by deduction at source (i.e. PAYE).
What is the filing date for tax year 2023-24?
31 January 2025
Failing to retain tax records maximum penalty?
£3000
Balancing payments surcharges of income tax late penalty payments (30 days after)?
5% of the tax unpaid 30 days after the due date
Balancing payments surcharges of income tax late penalty payments (6 months after)?
A further 5% of the tax unpaid more than six months after the due date
10% in total
Balancing payments surcharges of income tax late penalty payments (12 months after)?
A further 5% of the tax unpaid more than 12 months after the due date
15% in total
What are the quarter days?
31 January
30 April
31 July
31 October
Notice of commencing (compliance check) an enquiry into a submitted tax return must be given?
12 months of the actual submission date (e.g. by 31 December 2025 for an individual’s return submitted on 31 December 2024)
Notice of commencing (compliance check) an enquiry into a submitted tax return if a return is filed after the due submission date (i.e. it is filed late)?
The quarter day following the first anniversary of the actual filing date
When is discovery assessment for four years?
If tax lost is not due to the careless or deliberate behaviour of the taxpayer
When is discovery assessment for six years?
If tax lost is due to the careless behaviour of the taxpayer
When is discovery assessment for twenty years?
If tax lost is due to deliberate understatement or concealment (i.e. fraud) by the taxpayer.
Deliberate and concealed maximum?
100%
Deliberate and concealed minimum (with unprompted disclosure by taxpayer)?
30%
Deliberate and concealed minimum (with prompted disclosure by taxpayer)?
50%
Deliberate but not concealed maximum?
70%
Deliberate but not concealed minimum (with unprompted disclosure by taxpayer)?
20%
Deliberate but not concealed minimum (with prompted disclosure by taxpayer)?
35%
Careless maximum?
30%
Careless minimum
(with unprompted disclosure by taxpayer)?
0%
Careless minimum (with prompted disclosure by taxpayer)
15%
What must taxpayer do within 30 days from the receipt of the statutory review offer?
Accept the offer of a statutory review
Appeal directly to an appeal tribunal
When must written notice of appeal be given?
Within 30 days of the assessment or amendment being issued.
HMRC must state its view of the disputed matter (HMRC statutory review process)
Within 30 days of the taxpayer’s request
When HMRC has offered the review (HMRC statutory review process)
The taxpayer must accept the offer (in writing) within 30 days
When must HMRC conclude the review (HMRC statutory review process)
Within 45 days
What can happen within 30 days of completion of an HMRC statutory review (or the time limit for the review process having expired)?
The taxpayer may appeal to the tax tribunal
What is paper track?
Simple cases (e.g. an appeal against a fixed penalty) are settled by exchange of documents without any formal hearing.
What is basic track?
Case resolved by exchange of documents followed by a formal hearing
What is standard track?
Case resolved as for Basic Track, but procedure is more detailed and formal.
What is complex track?
Resolved as for Basic Track, but cases typically involve complex technical/legal principles or large sums of money.
When must a company notify HMRC of its first accounting period?
Within three months of when it started trade
Corporation tax return submitted for 31 March 2024?
31 March 2025
Calculate error for maximum penalty for carelessness (trading income)?
Trading income * (income tax % + NIC %) * penalty %
Official rate of interest?
2.25%
Rate of interest on underpaid tax?
6.5%
Rate of interest on overpaid tax?
3%
What is the filing date for income tax (2023-24)?
31 January 2025
What is the time limit to correct an income tax return (31 january 2025)?
12 months after the prescribed filing date
When can an amendment be made for a tax return?
Within 12 months of the prescribed filing date (31 January)
When can HMRC initiate a compliance check be made for a tax return?
Within 12 months of the actual filing date
Relevant amount for payment on account for income tax and NIC?
Total amount of income tax charged + NIC - tax deducted at source on company loan stock/ (2022/23 figures are used for 2024/24)
WHat does “more than 80% of tax deducted at source” mean?
PAYE in proportion of income tax liability
What is and isn’t included when determining the payment on account?
Included: Income tax liability and class 4 NIC
Not included: Capital gains tax liability
When is the balancing payment in respect of her tax liability for the tax year 2022-23 due?
31 January 2024
Compliance vs amendment?
Amendment - prescribed filing date
Compliance - actual filing date
When is a determination done?
If notice has been served on a taxpayer to submit a return but said return is not submitted by the filing date
Maximum penalty for the daily penalties?
90 days * £10 = £900
When must a company notify HMRC of it’s first accounting period?
Within 3 months of trading
When current year tax payable is less than previous year (calculating tax payable)?
Use current year for payments on account rather than the previous year
PAYE monthly penalty for number of employees 1 to 9?
£100
PAYE monthly penalty for number of employees 10 to 49?
£200
PAYE monthly penalty for number of employees 50 to 249?
£300
PAYE monthly penalty for number of employees 250+?
£400
Less than 16 days in UK
Previously Resident: Automatically not resident
Not Previously Resident: Automatically not resident
16 days to 45 days in UK
Previously Resident: Resident if 4 UK ties (or more)
Not Previously Resident: Automatically not resident
46 days to 90 days in UK?
Previously Resident: Resident if 3 UK ties (or more)
Not Previously Resident: if 4 UK ties (or more)
91 days to 120 days in UK?
Previously Resident: Resident if 2 UK ties (or more)
Not Previously Resident: if 3 UK ties (or more)
121 days to 182 days in UK?
Previously Resident: Resident if 1 UK ties (or more)
Not Previously Resident: if 2 UK ties (or more)
183+ days in UK?
Automatically resident
Sufficient ties test (Family)
Family tie
Sufficient ties test (Accommodation)
Accommodation tie
Sufficient ties test (Work)
Substantive work in the UK (40 or more days at any time in the tax year)
Sufficient ties test (90 days)
Spent more than 90 days in the UK in either of the previous two tax years
Sufficient ties test (Country)
Spending more days in the UK than in any other country in the tax year. Tie only relevant to a person who is UK resident in any of three previous years
Automatic UK tests (183 days)
Spending 183 days or more in the UK during the tax year
Automatic UK tests (home)
Individual’s only home is in the UK
Automatic UK tests (working)
Working full-time in the UK for any period of at least 365 days
Automatic overseas tests (16 days)
UK resident in any of the previous three tax years and fewer than 16 days are spent in the UK
Automatic overseas tests (not UK resident)
Individual was not UK resident in any of the previous three tax years and fewer than 46 days are spent in the UK
Automatic overseas tests (working)
Individual is working full-time overseas with no significant breaks, with fewer than 91 days spent in the UK and fewer than 31 working days in the UK
When is inheritance tax due on CLTs?
30 April following end of tax year
When is inheritance tax due on death estate?
Six months from the end of the month of death, or on delivery of the estate accounts to HMRC if earlier
When is inheritance tax due on a gift?
Later of:
30 April
6 months from the end of the month in which the gift is made
When are payment on accounts not required for 2023-24?
If relevant amount in 2023/24 did not exceed £1000
Can taxpayers dispute a dtermination?
NO
An amendment?
Make an amendment within 12 months of the prescribed filing date
A compliance check?
Can initiate a compliance check within 12 months of the actual filing date
What taxes are relevant in a payment on account?
Income tax and Class 4 NIC
Penalty for late paid tax for balancing payment and CGT (on or before penalty date)?
0%
Self-assessment late-filing tax returns penalty (0-3 months)
£100
Self-assessment tax returns late-filing penalty (3-6 months)
£100
£10 per day (max 90 days)
Self-assessment tax returns late-filing penalty (6-12 months)
£100
£10 per day (max 90 days)
Greater of 5% of unpaid tax and £300
Self-assessment tax returns late-filing penalty (12+ months)
£100
£10 per day (max 90 days)
Greater of: 5% of unpaid tax and £300
Greater of: % on unpaid tax conduct based and £300
Alternative filing deadline to 31 January 2025?
Three months from the issue of a notice to file.
Calculate payment on account for 31 July 2024?
(Class 4 NIC + Income tax liability) / 2
Calculate balancing payment?
(Class 4 NIC + Income tax liability + Class 2 NIC + capital gains) - ((Class 4 NIC + Income tax liability) / 2)
Notification of a compliance check?
Within 12 months of the actual filing date
When does the £5000 exemption happen?
Gift given by a parent on the occasion of a wedding
When does the £2500 exemption happen?
Gift given by a linear ancestor on the occasion of a wedding
When does the £1000 exemption happen?
Gift given by any other person on the occasion of a wedding
Who is responsible for paying additional inheritance tax arising from the gift made to the trust as a result of Percy’s death?
The trustees
When is inheritance tax due on a gift when someone is dead?
By 6 months from end of month of death. Tax is payable by trustees
Available NRB on death estate calculation?
£325000 + Any transferred NRB from partner - lifetime transfers in seven years before death
Retention period for employees?
31 January 2026
Retention period for self-employed and sole traders?
31 January 2030
Settlement of VAT liability of annual accounting period (nine monthly)
Nine monthly payments on account (each being 10% VAT due for the previous 12 months)
Starting at the end of 4th month of current annual accounting period.
Settlement of VAT liability of annual accounting period (balancing payment)
A balancing payment of the remaining sum, two months after the end of the current annual accounting period.
When is output VAT available in cash accounting?
Not payable until the customers have settled their invoices.
When is input VAT recoverable in cash accounting?
Until suppliers have been paid
Flat rate scheme association?
Annual accounting scheme, not cash accounting scheme
When do VAT invoices only need to be issued in flat rate scheme?
To customers who are VAT registered
Relief and flat rate scheme?
No relief is given for input VAT suffered
Can VAT be claimed on a car where there’s been private use?
NO
From what date was Richard required to be compulsorily registered for VAT?
First day of the second month
From what date was Richard required to notify HMRC?
Within 30 days
Flat rate scheme?
(Sales - exempt) * flat rate %
Can input VAT be claimed when using flat rate scheme?
No
What if a partnership leaves flat rate scheme, would it be unable to rejoin for at least 12 months?
Yes
Irrecoverable input VAT (new car leased)
New car is leased and also used partly for private purposes, 50% of the input VAT on the lease charge is irrecoverable
Irrecoverable input VAT (value of goods or services)
Value of goods or services withdrawn from the business for non-business purposes unless output VAT is accounted for on the private use
Irrecoverable input VAT (entertaining)
Entertaining, unless for staff or overseas customers
Goods acquired less than four years? (Input VAT claim)
Input VAT can be claimed
Services acquired less than six months? (Input VAT claim)
Input VAT can be claimed
Scale charge (input or output VAT)?
Output VAT
Can input VAT be reclaimed on a second hand container lorry?
YES
What is a substantial trader?
VAT liability less than 12 months exceeds £2.3 million
If VAT liability for quarter is £680000 and payment on account is £250000 for quarter ended 31 December 2023? (30 November 2023)
Payment on account of £250000
If VAT liability for quarter is £680000 and payment on account is £250000 for quarter ended 31 December 2023? (31 December 2023)
Payment on account of £250000
If VAT liability for quarter is £680000 and payment on account is £250000 for quarter ended 31 December 2023? (31 January 2024)
Balancing payment £680000 - £250000 - £250000 = £180000 with submission of VAT quarter
What quarter can impaired VAT be reclaimed if due date is 10 October 2023?
30 June 2024, as this is after 6 months outstanding
Time limit to reclaim overpaid VAT?
Four years
Tax point determines what?
The VAT period in which output tax must be accounted for and credit for input tax will be allowed
VAT invoices and flat rate scheme (issuing invoices)?
Businesses using the scheme must issue VAT invoices to their VAT registered customers
Businessses using flat rate scheme and input tax?
They cannot reclaim any input VAT suffered
Cash accounting scheme advantage on credit sales?
Output VAT on 10% of credit sales will be accounted for up to 1 month later than at present
Notification of deregistration if ceases trading on 31 March 2024?
30 April 2024
Actual deregistration if ceases trading on 31 March 2024?
31 March 2024
If business is sold as a going concern (advantage)
No output VAT will be payable in respect of the sale of the business
Is a penalty point for VAT incurred on filing or payment?
Filing
What impairment loss is included in input VAT?
If it’s more than 6 months
When are fees included in input VAT?
If it is 6 or less months
When are goods included in input VAT?
If it 4 years or less
Can repairing the exterior of the company’s office building be recovered input VAT?
Yes
Can extending the office building to create a new reception area be recovered input VAT?
Yes
VAT on cessation for non-current assets?
What is still owned (excluding cars)
Annual accounting scheme advantage (administration)?
Reduced administration
Annual accounting scheme advantage (payments on account)?
Payments on account based on previous year’s VAT liability will improve budgeting and cash flow if business is expanding
Postponed accounting effect?
Input and output VAT on imports are the same
An individual appealing against a penalty for late registration for VAT?
Must appeal directly to the tribunal
Is business asset disposal relief and gift holdover relief available on disposal of shares?
NO
Who can apply for cash accounting scheme?
Turnover exclusive of VAT does not exceed £1.35 million
When does cash accounting scheme cease?
When turnover exceeds £1.6 million
When can trader join cash accounting scheme?
A trader can join only if all returns and VAT payments are up-to-date
When can trader join annual accounting scheme?
Turnover exclusive of VAT does not exceed £1.35 million
Requirements for annual accounting scheme?
Up to date with VAT payments
Returns in annual accounting?
Only 1 return per year but POA throughout the year
When does POA for annual accounting start?
End of fourth month of the year. Done monthly after that
When are balance and return due for annual accounting?
Two months after year end
When can flat rate scheme be used?
If VAT exclusive turnover for next 12 months not expected to exceed £150000
Input VAT and flat rate scheme?
Is not recovered
When must flat rate scheme be left?
If VAT inclusive turnover for next 12 months exceeds £230000
Advantage of annual accounting (return)
Only one VAT return each year
Advantage of annual accounting (cash flow)
Manage cash flow more accurately
Advantage of annual accounting (quarterly)
Avoids quarterly calculations for input tax recovery
Disadvantage of annual accounting (monitor)
Monitor future taxable supplies to ensure turnover is not exceeded
Disadvantage of annual accounting (previous year)
Payments based on previous year’s turnover may not reflect current year turnover
Advantage of cash accounting scheme (cash flow)
It improves cash flow where customers are late payers
Advantage of cash accounting scheme (automatic)
It gives automatic relief for impairment losses
Advantage of cash accounting scheme (annual)
Can be used along with the annual accounting scheme
Advantage of flat rate scheme (detailed records)
Eliminates the need to keep detailed records of purchases and sales
Disadvantage of flat rate scheme (input VAT)
Not be beneficial for businesses with large amounts of input VAT to recover
When can company leave quarterly scheme?
VAT liabiltiy falls below £1.8 million
Can annual accounting scheme and cash accounting scheme be used together?
Yes
if date of deposit was before the basic tax point (date of despatch). What is the actual tax point?
Actual tax point is the date the deposit was paid
As an invoice was issued within 14 days of the basic tax point. What is the actual tax point?
The date of the invoice
When default interest not charged?
Where voluntary disclosure can be made by entering the underpayment on the next VAT return
When must BADR relief be claimed?
By 31 January 2026
When are chattels exempt from CGT?
If they are wasting assets
Spouse exemption in an estate?
Is deducted to get the chargeable estate
Does goodwill qualify for rollover relief?
NO (for companies)
Notice of chargeability to capital gains tax (date)?
5 October 2024
Business asset disposal relief lifetime limit?
£1 million
What is deducted in nil rate band at Stage 1?
CLTs not PETs
What is deducted in nil rate band at Stage 2?
CLTs and PETs
When is RNRB used?
Died on or after 6 April 2017
Passes to direct descendants
Annual allowance?
£40000
Income limit for annual allowances?
£240000
What percentage of pension funds can be withdrawn as a tax-free lump sum?
25%
What percentage of pension funds if excess value is taken as a lump sum?
55%
Sale of residential property due date?
60 days
Is indexation included in consideration received table?
NO, is done separately ina share pool
Future VAT liability exceeding £85000 (registeration and notification)
Register: 1st day of same month
Notification: End of first month
WDA on a disposed asset in capital allowances?
No WDA is claimed
Relief on impairment losses in VAT is determined by?
The payment due date
When property owned more than six years?
Use market value
In asset and subsequent working. should I use figure when purchased or when first provided?
First provided
File VAT return (annual accounting scheme)
Return due 2 months after the end of the accounting period
Pay VAT liability (annual accounting scheme)
Payment due within 2 months of month 12
Payments on account for annual accounting scheme?
10% of previous year VAT liability. Done from months 4 to 12
Insurance on property income (cash basis vs accruals)?
Cash basis: Whole
Accruals basis: TIme-apportioned
When is payment on account not required?
When relevant amount is less than £1000
SLA when sold (WDA or no WDA)?
No WDA
When there’s cessation (WDA or no WDA)?
No WDA
Are earnings class 1 or class 1a?
Class 1
If question says trader has PAID a premium for granting a short lease?
Use the division working when put into the computation (lease premiums)
How does director’s renumeration interact with trading profit?
It is deducted
Where are parternship profits included in the computation?
After qualifying interest but before personal allowance
What occupational contribution is deducted from income?
The one made by Percy, not the company
Carry forward relief (for individual)?
Only available against trading income
When will bonus be treated as received?
Earlier of date of payment or date of entitlement
Time relief for terminal loss relief?
5 April 2028
What happens with exempt employment income?
Not added to the salary
Time limit for claims against total income?
31 January 2026
When is there NIC on a car?
For company, not the individual
What NIC does a partner have to pay?
Class 4 and class 2
When is fuel benefit charged?
When an employer provides free or subsidised fuel for private use of a company car. The amount is £27800
Are dividends relevant in corporation tax?
NO
Redecorating a room in MD’s house (excluded or included in input VAT?
Excluded
When there is some private use on a leased car (VAT calculation)
Cost * private use * 20%
When cost of original shareholding is passed on to new shareholding in a gift (in a chargeable gain)?
Original cost * (gift shares/Original shares)
When loss relief says as soon as possible?
Relief for the early years
When does interest for corporation tax run from (the 6.5% calculation)?
1 October 2024
When business is run as a sole trader and renumeration?
There are no gross director’s renumerations
Balancing payment that’s over six months late and where the amount is £2600?
1 month late: £2600 * 5%
6 month late: £2600 * 5%
Can trading incoem loss be used against all income when brought forward (for a company)?
YES
The choices in a loss relief for a company?
Carry back
Current year
Carry forward
Formula for gift holdover?
APOC
What does a new delviery van qualify for in capital allowances?
AIA
Leasehold premium division (added or subtracted in computation)?
Subtracted
What is the penalty for when four penalty points are reached in VAT filing penalties?
£200
How long must VAT invoices be retained for?
Six years
When is interest for income tax start date?
31 January 2025
