Stuff to rememner Flashcards
Pension scheme contributions
Are exempt
Pension scheme contributions
Are exempt
Trivial benefits are exempt when
cost < £50 to provide
capped at £300
Pension and associated tax planning are exempt when
available to all employees
up to £500 per tax year
Childcare facilities run by employer are
exempt
Childcare payments are exempt for (3)
- under £55 a week starting before 6/4/2011
- for those joining since 6/4/11, limit is £28 p/w for higher rate and £25 p/w for additional rate payers
- scheme not available to new applicants after 4 october 2018
mobile phone is exempt
if one phone, still exempt if available for private use
Free/subsidised meals are exempt if
offered to all employees
Parking space near place of work is?
exempt
bikes and safety equipment is?
exempt if offered to all employees
Responsibilities of HMRC:
1) Collect and administer
2) Pay and adminster
3) Collect repayments of
4) Ensure employers meet
5) Protect us from
1) collect and administer IT, CGT, NIC, CT and VAT
2) Pay and administer universal credit, tax credits and child benefit
3) Collect repayments of student loans
4) Ensure employers meet minimum wage requirements
5) Protect us from tax fraud, smuggling, drug importation
Sources of tax law (3)
Tax statutes
Finance acts
Statutory instruments
Exempt income examples: (5)
ISAs Betting Lottery Premium bonds Scholarships
Savings income tax free:
How much? why?
Up to £5000, if non saving income is
Gift aid
Charity receives donationx(100/80)
extend tax limits by gross donation (tax inclusive)
Marriage allowance
May transfer 1250 of PA if:
Transferor = basic or non taxpayer
Transferee = basic rate taxpayer
General rules of taxable benefits: (3)
benefit = cost to employer
Always time apportion
Always deduct employee contributions
Not job related accommodation tax
1: higher of rental value or annual value
2: additional charge if cost > £75000
interest rate x (cost - 75000)
Use market value of accommodation if
Acquired for more than £75000 and gap of 6 years until employee moves in
Taxable benefit of furniture
20% x market value
List price of car includes: (2)
Optional accessories provided with car
Further accessories value >£100 provided later
Taxable benefit for fuel
£24500 x co2 rate%
No reduction for partial employee contribution
taxable benefit of assets for private use
higher of
20% x market value when provided
rent paid by employer for asset
Income tax and NICs through PAYE due
19th of each month (22nd if electronic payments)
Number of employees for must pay PAYE electronically
250
Can pay PAYE quarterly if
monthly PAYE total <1500
PAYE codes: positive? negative? Marriage allowance?
if PA is positive: remove last digit, add L to end
if PA is negative : remove last digit, deduct 1, add K at beginning
if marriage allowance: add N for transferor, add M for transferee
CapEx allowable or disallowable?
Disallowable (ie taxable)
Improvement or enhancement is disallowable
depreciation is disallowed
but repairs and maintenance are allowable
Trading income not taxable if
receipts <1000
Appropriations of profit allowable or disallowable?
Disallowable
except reasonable payment to family as salary
Bad debts allowable or disallowable?
Trade bad debts = allowable
non-trade bad debts disallowable
Entertaining allowable or disallowable?
Staff entertaining: allowable
Customer entertaining: not
Allowable gifts are
To employees
Trade samples
To customers if: business name on it, no food drink tobacco or vouchers, cost<50
Donations allowable or disallowable?
Small local charities = allow
National charities = disallow
Political = disallow
Gift aid = disallow
Fines and penalties allowable or disallowable?
Disallow
except parking fine of employee on business
Interest allowable or disallowable?
on business loans = allow
on late payment of tax, non-business loans = disallow
Employment payments and pensions allowable or disallowable?
allowable
Employment payments and pensions allowable or disallowable?
allowable
Trivial benefits are exempt when
cost < £50 to provide
capped at £300
Pension and associated tax planning are exempt when
available to all employees
up to £500 per tax year
Childcare facilities run by employer are
exempt
Childcare payments are exempt for (3)
- under £55 a week starting before 6/4/2011
- for those joining since 6/4/11, limit is £28 p/w for higher rate and £25 p/w for additional rate payers
- scheme not available to new applicants after 4 october 2018
Period of ownership is _____ for calculating WDA of assets
irrelevant (do not x9/12 for 9 months ownership in period)
Free/subsidised meals are exempt if
offered to all employees
Parking space near place of work is?
exempt
bikes and safety equipment is?
exempt if offered to all employees
Responsibilities of HMRC:
1) Collect and administer
2) Pay and administer
3) Collect repayments of
4) Ensure employers meet
5) Protect us from
1) collect and administer IT, CGT, NIC, CT and VAT
2) Pay and administer universal credit, tax credits and child benefit
3) Collect repayments of student loans
4) Ensure employers meet minimum wage requirements
5) Protect us from tax fraud, smuggling, drug importation
Sources of tax law (3)
Tax statutes
Finance acts
Statutory instruments
Exempt income examples: (5)
ISAs Betting Lottery Premium bonds Scholarships
Savings income tax free:
How much? why?
Up to £5000, if non saving income is
Gift aid
Charity receives donationx(100/80)
extend tax limits by gross donation (tax inclusive)
Marriage allowance
May transfer 1250 of PA if:
Transferor = basic or non taxpayer
Transferee = basic rate taxpayer
General rules of taxable benefits: (3)
benefit = cost to employer
Always time apportion
Always deduct employee contributions
Not job related accommodation taxable
1: higher of rental value or annual value
2: additional charge if cost > £75000
interest rate x (cost - 75000)
Use market value of accommodation if
Acquired for more than £75000 and gap of 6 years until employee moves in
Taxable benefit of furniture
20% x market value
List price of car includes: (2)
Optional accessories provided with car
Further accessories value >£100 provided later
Taxable benefit for fuel
£24500 x co2 rate%
No reduction for partial employee contribution
taxable benefit of assets for private use
higher of
20% x market value when provided
rent paid by employer for asset
Income tax and NICs through PAYE due
19th of each month (22nd if electronic payments)
Number of employees for must pay PAYE electronically
250
Can pay PAYE quarterly if
monthly PAYE total <1500
PAYE codes: positive? negative? Marriage allowance?
if PA is positive: remove last digit, add L to end
if PA is negative : remove last digit, deduct 1, add K at beginning
if marriage allowance: add N for transferor, add M for transferee
CapEx allowable or disallowable?
Disallowable (ie taxable)
Improvement or enhancement is disallowable
depreciation is disallowed
but repairs and maintenance are allowable
Appropriations of profit allowable or disallowable?
Disallowable
except reasonable payment to salary as salary
Bad debts allowable or disallowable?
Trade bad debts = allowable
non-trade bad debts disallowable
Entertaining allowable or disallowable?
Staff entertaining: allowable
Customer entertaining: not
Allowable gifts are
To employees
Trade samples
To customers if: business name on it, no food drink tobacco or vouchers, cost
Donations allowable or disallowable?
Small local charities = allow
National charities = disallow
Political = disallow
Gift aid = disallow
Fines and penalties allowable or disallowable?
Disallow
except parking fine of employee on business
Interest allowable or disallowable?
on business loans = allow
on late payment of tax, non-business loans = disallow
Legal and professional fees allowable or disallowable?
Trade related = allow
dealings with HMRC = disallow
capital related legal fees = disallow
Exception: allowable if legal fees for renewal of short lease (50 years)
Employment payments and pensions allowable or disallowable?
allowable
Hiring, renting plant and equipment allowable or disallowable?
allowable
Leasing a car allowable or disallowable?
CO2 > 110 disallowance = 15% x hire charge
CO2 <110 allowable
CO2>110 and private use disallow = allowable - (85% x hire charge x business%)
Adjustment to profit for goods taken for private use
income adjustment must reflect market value not cost
Non-trade income most be ____ trading profits.
Non trade incomes include:
deducted from
Rental income, profits on disposal of fixed assets, investment income
Assets in the main pool include
Machinery and equipment
Vans, lorries
Cars with high emissions
Period of ownership is _____ for calculating WDA of assets
irrelevant (do not x9/12 for 9 months ownership in period)
If written down value in main pool <1000
write off balance as an allowance
Single asset pools are for
Assets with private use by the business owner (only allow for business use %)
If asset pools end negative?
If asset pools end positive?
Give back excess as balancing charge
Take away balancing allowance (still business use %)
AIA is
Annual investment allowance = £200,000
Applies to most P&M but not cars
Small pools written
If main pool ends <1000
Checking overlap profits
Count back months from March
March = 0, Feb = 1, etc..
Tax for closing accounts
From end of last period to date of ceasing
Then deduct the overlap profits
Cash basis accounting, receipts amounts?
Can start with <150000
Must leave when previous year >300000
Class 1A contributions are a tax on
Taxable benefits, suffered by employer
Inform HMRC of need for self assessment return by:
October 5th following tax year
Short tax return
for people with turnover <85000
HMRC calculate your tax
HMRC can amend tax returns with errors
Within 9 months of actual filing date
Taxpayer can amend tax returns: Any reason? Overpayment?
Within 12 months of normal submission (31 Jan)
Within 4 years of end of tax year
POAs not required if
Last years tax paid under self assessment was less than 1000 or less than 20% of total liability
Balancing payments are: Due by? for what?
31 Jan following tax year
Balance of IT and Class 4
CGT
Class 2
Interest on late payments
Calculated from day after actual submission date to the day before payment is made
Must keep records for:
Corporation tax?
Income and CGT?
VAT?
6 years from end of accounting period
Fifth anniversary of 31 Jan after tax year (if business)
First anniversary of 31 Jan after tax year (if not)
6 years
Record keeping penalties
£3000 for each year/accounting period
Senior Accounting Officer (SAO)
Role?
Penalty?
Qualifying?
Ensure adequate records are kept
£5000 penalty for failure
Turnover>£200M and/or BS total>£2B
Assets exempt from CGT
Cash Cars Gilt securities ISAs National savings and bonds
Chattels rules: wasting? non?
Wasting=exempt
Non-wasting= <6000 exempt
>6000 use 6000 value and 5/3 rule
Exemptions for capital gains: Business? Individuals?
No annual exempt amount for companies
12300 individuals
Augmented profits=
TTP + exempt ABGH distributions (dividends from UK and overseas non-51% group companies)
Augmented profits limits
1.5mil and 20mil
Scaled down for short accounting periods
Non-large/very large companies corp tax payment date
9 months and 1 day after end of accounting period
Time after beginning to give written notice for corp tax
3 months
Corp tax return must be submitted
Within 12 months of end of accounting period
Can deregister for VAT if
Taxable turnover in next 12M is less than 83000
Must register for VAT if? Notify? Start?
Historic test (12 months) >85000
Notify 30 days, start next month after notifying
Future test (next 30 days) >85000
Notify 30 days, start day of test
Actual tax point
Earlier of:
Goods available/service complete (basic tax point)
Payment received
Invoice issued
If BTP is used, then use invoice if issued within 14 days
Bad debt VAT relief if:
Debt > 6 months overdue and
Debt written off
Input VAT is irrecoverable for:
Cars (unless exclusively for business)
Customer entertaining
Non business items
Items with no VAT receipt
Input VAT before registration can be recovered on first return if:
Goods supplied within 4 years and still in use
services within 6 months
VAT substantial trader
VAT liability>2.3M
1/24 previous total liability paid at end of second and third months of each quarter
Then balancing payment at end of month following quarter
Keep VAT records for:
6 years
A ‘simplified’ invoice can be issued for
supplies under £250
Flat rate VAT scheme
industry % x Turnover (VAT included)
Includes all exempt and taxable
1% reduction in first year of registration
Small business VAT penalties
Turnover <150000
One extra chance before penalties
You can correct VAT errors on next return if:
error less than
£10000 or 1% taxable turnover up to 50k
Notice of intention to make an enquiry by HMRC by:
First anniversary of actual submission date
or if late year from end of quarter of submission
Time limits for discovery assessments
Not due to careless or deliberate behaviour = 4years
Careless = 6 years
Deliberate = 20 years
Taxpayer may appeal against? how long?
Request to submit documents, compliance check amendments, discovery assessment, VAT assessment, imposition of penalty
30 days to appeal
True or false? FYAs are effected by business use
True
