Chapter 1

Question 1

What is an indirect tax?

Answer 1

a type of tax collected by an intermediary (eg a shop) from the person who bears the ultimate economic burden of the tax (eg the consumer).

Question 2

What is a direct tax?

Answer 2

a tax that a person or organization pays directly to the entity that imposed it e.g income tax

Question 3

indirect tax examples

Answer 3

Tobacco
alcohol
petrol

Question 4

Who has to register for VAT (list 5)

Answer 4

Sole proprietor
a partnership
a company
a club
an association
a charity

Question 5

What is a historic turnover test?

Answer 5

The historical test is performed at the end of each calendar month, and when performed, if the value of taxable supplies for the past 12 months exceeds the VAT registration threshold, then the business must notify HMRC within 30 days

Question 6

Future turnover test

Answer 6

The future test applies continuously in that if there is reason to believe that the value of taxable supplies in the next 30 days alone will exceed the VAT registration threshold, then the business must notify HMRC within 30 days.

Question 7

HMRC Penalties

Answer 7

Non-deliberate
Deliberate
Deliberate and concealed

Question 8

2 types of disclosure

Answer 8

Unprompted disclosure
Prompted disclosure

Question 9

What is Potentially Lost Revenue(PLR)

Answer 9

percentage of tax that had been lost due to error being undetected

Question 10

Goods and services charged at a lower rate of 5%

Answer 10

Energy
fuel
renovating buildings

Question 11

Goods and services charged at zero rate

Answer 11

Goods and services charged at zero rate
Equipment for the blind and disabled
prescriptions
construction of new residential buildings
transport for 10 or more people