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
