Task 1 answers

Question 1

Osborne P1

Client asks for profits to be reduced using harmless TA

Answer 1

1. Review work to ensure all legitimate rues and allowances have been used in the most tax efficient way.

2.

• Explain (to examiner) diff between TA & TE
• Identify what the client asks is a actually TE since it involves manipulation/misrepresentation. (concealment, pretense, non-disclosure, misrepresentation)

3.

• Explain the CofE makes clear accountancy and tax work must be carried out with professional competence and be consistent with the law.
• That ‘adjusting’ (ie manipulating) figures would not be consistent with the law.
• That though client bears ultimate responsibility for submission we cannot be associated with such a submission as we know it contains inaccuracies

4.

• Client must be asked to reconsider and agree to submit original figures.
• If client refuses we must cease to act and inform HMRC we no longer act.
• We don’t give reason as this would be breach of confidentiality.
• There is no suggestion of money laundering which would override the confidentiality rules.

Question 2

T6 small written Q

Explain to someone how tax on savings income will be calculated. (neither AAT practice has a 2nd written q)

Answer 2

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