NIC & Personal Tax Flashcards
Andrew is an employee (not a director) of Toes Ltd with an annual salary of £50,000. and bank interest of approximately £1,500 per year.
- Select which of the following options correctly identifies the type of self assessment return Andrew is required to file each year.
a) Short tax return
b) Full tax return
- Assuming Andrew were to leave his employment to set up in business with a turnover of £10,000 per annum, what type of self assessment return would he then be required to file each year?
c) Short tax return
d) Full tax return
1 a
2 a
Barbara has been trading as a self-employed beautician for many years. She prepares accounts to 31 December each year.
She submitted her tax return for 2021/22 on 1 November 2022.
Until what date must she retain her business records for the year to 31 December 2021?
- 31 December 2026
- 31 December 2027
- 31 January 2027
- 31 January 2028
The correct answer is: 4. 31 January 2028.
- Five years after the 31 January following 2021/22 (5 years after 31 January 2023).
Robert is a director of Wagner Ltd, a company which he owns 50% of the shares of. He takes £50,000 a year out of the company, £20,000 as a salary and the balance as dividends.
The company also employs George, with an annual salary of £15,000
True or false,
Wagner Ltd will pay Class 1 secondary NICs on total employee remunerations of £65,000 (before deducting employee allowance)
False, Dividends are not earnings, so secondary class 1 NICs will be £15,000 + £20,000
How long does a taxpayer have to claim overpayment relief from their individual tax return?
4 years from end of ACCOUNTING PERIOD
How long does a taxpayer have to amend their individual tax return?
12 months from NORMAL submission date
How long does HMRC have to amend an individual tax return?
9 months from ACTUAL filing date
What is the threshold for submitting a short tax return?
Employees, pensioners and sole traders with turnover <£85,000
If a taxpayer is sent a return by HMRC, but they have no income to declare for that year, must they submit the return to HMRC by the due date?
Yes, a taxpayer who is sent a return by HMRC must submit it by the due date, even if there is no income to declare
Is there an age threshold for Class 1 Primary?
Is there an age threshold for Class 1 Secondary?
Class 2 NICS?
Class 4 NICs?
Class 1 Primary: Yes 16-66
Class 1 Secondary: No
Class 2 NICs: Yes, 16-66
Class 4 NICs: Yes, 16-66
Are vouchers included in the calculation of Class 1 Primary?
Are vouchers included in the calculation of Class 1 Secondary?
Yes to both
In what circumstances are employers not eligible for the employee allowance?
Companies with just one single director and no other employees.
Businesses whose total class 1 secondary liability in PY was £100,000 or over
When are POA not required?
If last year’s tax paid under self assessment was < £1000
OR
< 20% of total liability
What are they payment dates for POA & Balancing Payment?
When are class 2 NICs due?
When is CGT due?
1st POA : 31st Jan During tax year
2nd POA : 31st July after end of tax year
Balance : 31st Jan after end of tax year
Class 2 NICs due: 31st Jan after end of tax year
CGT: 31st Jan after end of tax year
How do you calculate POA?
50% (PY IT + Class 4)
What is the threshold to pay a balancing payment (of income tax) through PAYE
If the balancing payment < £3,000
AND
Has filed by ACTUAL submission date
From what date range do you calculate interest on late paid tax for individuals?
Period minus due date and date of payment
From what date range do you calculate interest payable by HMRC on overpaid tax?
Period minus day of repayment (INCLUDE ORIGINAL DUE DATE)
How long must an individual with trading income retain their records?
5Y from 31 Jan after end of that tax year
How long must an individual with NO trading income retain their records?
2Y from 31 Jan after end of tax year
