Administration of tax Flashcards
When must an individual liable to IT or CGT notify chargeability by?
Before 5th October following the end of the tax year.
How long do HMRC have to amend obvious errors?
Within 9 months of filing date.
How long does the taxpayer have to amend a return for obvious errors?
Within 12 months of the later of:
- 31 Jan after end of tax year
- 3 months after issuement
When should employers report to HMRC?
Every time a payment is made to an employee
What is the FPS?
Full Payment Submission - payroll software
When should FPS be submitted?
On/before payday
When should employers pay PAYE and NICs?
22nd of the month following the payroll month.
E.g. 31st March payday, 22nd April pay PAYE and NIC
What is the P11D form?
End of year form recording details of benefits provided to employees
Pay by 6th July following end of tax year
What is the P60 form?
End of year form recording details of gross pay, tax deductions and NICs for employee and employer
Due 31 May following tax year end
What is the P45 form?
Particulars of employee leaving: tax code, gross pay to date, tax and NICs deducted.
How long does it take penalty points accumulated to expire?
2 years unless a threshold has been reached
How can a business reset its points to 0?
When all VAT returns have been submitted on time and all VAT returns in the last 2 years have been submitted
When can non-deliberate VAT return errors be corrected?
On the next return providing it doesn’t exceed £10k or 1% of net VAT turnover
IN THE TABLES
How long must a record of Corporation tax be kept for?
6 years from end of accounting period
When must HMRC give notice by to conduct an enquiry?
First anniversary of the actual submission date or the quarter day following the first anniversary
When can HMRC make a discovery assessment?
If full disclosure has not been made by the taxpayer
When are the submission dates for personal self-assessment tax returns?
IN THE TABLES
When are the payment dates or income tax?
IN THE TABLES
How are balancing payments calculated?
Add:
Income tax
Class 2 NIC
Class 4 NIC
CGT
Less:
POA
Tax paid under PAYE
How are payments on account (POA) calculated?
1/2(IT + Class 4 NIC) paid under self assessment for the previous year
What’s the best way to display dates?
USE A TIMELINE
What are the penalties for late filing of a self-assessment return?
IN THE TABLES
What are the penalties for late payment of a self-assessment return?
IN THE TABLES
When must new companies give notice to HMRC about a return?
3 months after start of their 1st accounting period (source of taxable income)
When must companies notify HMRC about taxable profits?
Within 12 months of the end of an accounting period
When is the submission date for a full CT return (CT600)?
Within 12 months of the end of the period of account
How long do companies and individuals get to amend a return?
Within 12 months of when the return should have been filed
When can companies claim for overpayment relief?
Within 4 years of the end of the accounting period?
How are companies taxed for late filing of CT?
IN THE TABLES
£100 or £200 fixed
Bottom 2 in addition to this
Persistent failure - late 3 times running
What are the penalties for late PAYE returns/submissions?
IN THE TABLES
When is the due date for the filing of a VAT return and paying VAT owed?
7 days after the month following the end of the return period
IN THE TABLES
What are the penalties for late submission of a VAT return?
IN THE TABLES
What are the penalties for late payment of a VAT return?
IN THE TABLES
When is a taxpayer classified as careless?
Taxpayer hasn’t taken reasonable care in completing the return
When is a taxpayer classified as Deliberate but not concealed?
Deliberately made an inaccurate return but not concealed it
When is a taxpayer classified as Deliberate and concealed?
Deliberately made an inaccurate return and made an effort to conceal it
What are the penalties for failure to notify chargeability?
IN THE TABLES
Done on PLR, tax individual first
What must an inaccurate return result in for a penalty to be charged?
Understatement of tax liability or…
False/increased loss for taxpayer or…
False/increased repayment of tax to taxpayer
What are the penalties for an incorrect return?
IN THE TABLES
Done on PLR, tax individual first
How long must records of IT and CGT be kept?
Business - 5th year of 31st Jan following end of tax year
Other - 1st year of 31st Jan following end of tax year
How long must a record of VAT be kept?
6 years
When may HMRC send out a short return?
Sent to non-director employees, pensioners/sole traders
> £85k turnover
How are tax returns dealt with for partnerships?
Income and gains reported to HMRC for checking against individuals’ returns
Return submitted same way as individuals return.
Partners taxed on their share of profit.
What are the time limits for HMRC to make a discovery assessment?
Not careless or deliberate - 4 years
Careless - 6 years
Deliberate - 20 years
What can a taxpayer appeal against?
HMRC Request
Amendments to self assessment
Discovery assessment
Vat assessment
Penalty
Appeals must be made within 30 days
If IT and NIC is <1.5k a month when are payments due?
Quarterly
When are POA not required?
Liability <1k
<20% of previous year tax and NI
How are balancing payments of less than 3k collected?
Via following year PAYE
Can a tax payer appeal against and apply to postpone the tax due under an assessment raised as a result of an equiry into a return?
Yes
When can a VAT error not be corrected in the next return?
If the error exceeds £50k
How are late POA and balancing payment dealt with?
All liable to interest
Only balancing payments liable to a penalty
