Tax

Question 1

Types of taxes

Answer 1

Shopping taxes, activity taxes, capital taxes, income taxes, penalty taxes.

Question 2

Who is in charge regarding taxes?

Answer 2

HMRC empowered by Parliament and acting on the basis of Finance Act

Question 3

Tax return deadlines

Answer 3

31 October for paper based, 31 January for electronic and payment is due by 31 January

Question 4

Where rules regarding employment tax are recorded?

Answer 4

Income Tax Earnings and Pension Act 2003, Part 2 - basic charge on earnings Part 7 - law on share plans

Question 5

Income tax - bands and allowance

Answer 5

12.5k tax free, until you start earning 100k, then allowance is reduced by 1£ for every 2£ above 100k. 20%, 40% and 45%

Question 6

NIC

Answer 6

12% and 2% on earnings above 100k (upper limit)

Question 7

Capital gains tax - what is it?

Answer 7

CGT is 10% but if income tax and capital gain exceed upper limit its 20%, exemptions apply. Tax free allowance is 12,000£. Trustees and PRs (deceased) 20% tax. Higher rates apply to property.

Question 8

what is the election that allows to charge tax on award for forfeitable shares?

Answer 8

Section 431 of ITEPA within 14 days of acquiring shares

Question 9

CSOP taxation

Answer 9

30,000£ options valued at grant are tax free if exercised after 3 years. Exceptions: TUPE, Redundancy, Retirement or disability, death, then within 3 years is ok, transfer of company employees, takeover of the company, but have 6 months window (deceased 12 months). For deceased - no tax at all.

Question 10

PAYE regulations

Answer 10

part 11 of ITEPA and PAYE Reg

Question 11

DOTAS

Answer 11

disclosure of tax avoidance schemes

Question 12

GAAR

Answer 12

general anti abuse rules

Question 13

how SIP can benefit company tax position?

Answer 13

deduction of corporate tax is available for free and matching shares, for the value of granted shares