Chapter 1 - 1.2 - Sources of Tax Practice

Question 1

What does the ‘efficiency principle’ state?

Answer 1

The cost of collection tax should be less than the tax raised

Question 2

What do HMRC do in terms of tax?

Answer 2

They are a body that controls and administers most areas of UK tax law, but they do not make the tax rules

Question 3

What are the five sources of tax practice?

Answer 3

• Statements of practice
• Extra-statutory concessions
• Internal guidance manuals
• HMRC website
• HMRC press releases

Question 4

What do statements of practice do?

Answer 4

Provide HMRC’s interpretation of tax law and often provides clarification or more detail on how it should be applied

Question 5

What do extra-statutory concessions do?

Answer 5

They are given to specific taxpayers to relax the tax legislation. They are often given where undue hardship or anomalies would otherwise occur

Question 6

What happened in 2005 regarding extra-statutory concessions and how does this affect them?

Answer 6

The legality of extra-statutory concessions was successfully challenged in 2005, so they are gradually being withdrawn or made law as appropriate

Question 7

What is the first source of tax practice?

Answer 7

Statements of practice

Question 8

What is the second source of tax practice?

Answer 8

Extra-statutory concessions

Question 9

What is the third source of tax practice?

Answer 9

Internal guidance manuals

Question 10

What is the fourth source of tax practice?

Answer 10

HMRC website

Question 11

What is the fifth source of tax practice?

Answer 11

HMRC press release