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Tax > Tax BPP notes > Flashcards

Tax BPP notes Flashcards

1
Q

Case law?

A

Tax cases taken to court, judge decision forms case law, sets precedent for future cases

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2
Q

Exempt or chargeable?
Scholarships
Income tax repayment interest
Betting winnings

A

All exempt

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3
Q

Savings income falling in the starting rate band is taxed at ___, which only applies to taxpayers with NS taxable income of _______

A

0%, less than £5,000

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4
Q

Describe the nil rate savings band

A

£37,500: £500 taxed at 0%

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5
Q

Dividend nil rate?

A

£2,000

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6
Q

Computing tax payable steps (2)

A

1) calculate tax liability on all income

2) deduct tax suffered at source

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7
Q

Charity gross donation = ?

A

Net x (100/80)

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8
Q

Taxable benefit = cost to _____ of providing the benefit

A

Employer

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9
Q

Always _____ _______ taxable benefits if only available for part of tax year

A

Time apportion

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10
Q

Cash voucher benefits should be treated as what?

A

Cash benefits

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11
Q

When is employer accommodation taxable?

A

When not job related

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12
Q

What three tests are there for determining if accommodation is job related? How many of these must it meet?

A
  1. Necessary
  2. Customary
  3. Security

Only one

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13
Q

How is tax on accommodation determined? (3)

A
  1. Basic charge: higher of rental value or annual value
  2. If original cost > 75,000, then ROI at start of year * (cost-75,000)
  3. Original cost + capital improvements before start of tax year
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14
Q

When can directors claim accommodation benefits? (2)

A

1) own <6% of the company

2) they work full time or the company is non-profit

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15
Q

Under expenses of living accommodation, furniture= ?

A

20% * MV

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16
Q

Taxable process for cars?

A

C02 emissions-75 = b

B/5 + 20 = benefit %

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17
Q

Cars registered from 6 April 2020 get a ____ reduction

A

2%

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18
Q

Vans for private use: benefit = ?

A

£3490

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19
Q

Vans for private use: separate fuel benefit = ?

A

£666

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20
Q

IT and NICs are paid by ____ each month

A

19th (22nd for electronic payments)

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21
Q

Employers of over _____ must pay PAYE electronically

A

250

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22
Q

If monthly pay totals <15001, employer can pay _______

A

Quarterly

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23
Q

PAYE code: positive normal?

A

Allowances - deductions

Remove last digit, add L for basic personal allowance

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24
Q

PAYE code: negative normal?

A

Allowances - deductions
Remove last digit
Deduct 1
Add K at beginning of code

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25
Q

PAYE code letter for marriage allowance transferor?

Transferee?

A

N

M

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26
Q

If trading receipts < ______ or ________, trading income is not taxable

A

£1,000

Allowable expenses as normal

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27
Q

What is the trading allowance?

A

£1,000

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28
Q

Gifts are allowed if they cost less than ____

A

£50

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29
Q

Renting cars:

C02 > 110g/km:
C02 < 110g/km:
C02 > 110g/km and private use:

A

Flare rate disallowance: 15% * hire charge
No adjustment
85% * hire charge * business %, then disallow the balance

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30
Q

Capital allowance assets?

A

Assets performing a ‘function’ within the business rather than forming part of the setting

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31
Q

Capital allowances are calculated for ______ not _____

A

Period of account, tax year

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32
Q

Firs year allowance? Examples?

A

100% relief for expenditure on certain assets

New and unused zero emission goods vehicles, new qualifying low emission cars, electric vehicle charging points

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33
Q

Annual Investment Allowance?

A

200,000 pa

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34
Q

Cash basis accounting?

A

An election to use the cash basis of accounting for the calculation of taxable trading income, which can be made by unincorporated businesses

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35
Q

Secondary Class 1 contributions are suffered by _______

A

The employer

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36
Q

Class 1A contributions formula:

Who is it suffered by?

A

Taxable benefits * 13.8%

The employer

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37
Q

Class 2 NIC rate?

Who does it apply to?

A

£3.05 a week

Self-employed individuals, aged 16 to state pension age

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38
Q

Class 4 NICs are payable self-employed individuals based on their ____________

A

Taxable trading profits

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39
Q

When should you inform HMRC if a return is not automatically issued?

A

5/10/21

40
Q

Who can use a short tax return?

When is it due?

A

Employees, pensioners and some traders with turnover < £85,000
Normal submission due dates

41
Q

How long does HMRC and the taxpayer have to amend tax returns?

A

HMRC: within 9 months of actual filing date
Taxpayer: 12 months of normal submission date, or 4 years if overcharged tax

42
Q

If a balancing payment is less than ______, an employed taxpayer can choose for this to be collected via next year’s PAYE instead of income lump sum

A

£3,000

43
Q

POA due dates

A

1/01

1/07

44
Q

Corporate tax and VAT records must be kept for _______ years from end of accounting period

A

6

45
Q

Income and capital gains tax must be kept until when?

A

Fifth anniversary of 31st January following end of tax year

46
Q

Acquisition costs, incidental costs of acquisition and enhancement expenditure are all ______ costs for CGT purposes

A

Allowable

47
Q

Annual exempt amount = ?

A

£12,300

48
Q

Taxable gains = _______ - Annual Exemption

A

Chargeable gains

49
Q

CGT: higher rate income taxpayer taxed at _____

CGT: basic rate income taxpayer taxed at _____ for their unused basic rate, then ______ for the remainder

A

20%

10%, 20%

50
Q

As a corporation is a different entity to its directors and shareholders, there is no need to adjust for _______ expenses or appropriations of profit

A

Private

51
Q

TTP interest = all interest income - interest payments on ________ loans

A

Non-trade

52
Q

Property income= accrued rental income - ___________

A

Accrued rental expenses

53
Q

Indexation allowance equation?

A

((RPI at disposal or at December 2017 - RPI at date of expenditure)/RPI at date of expenditure) * cost

54
Q

Qualifying donations for corporations are deductible from total income and gains when _____, not _______

A

Paid, accrued

55
Q

Corporation tax equation?

A

Corporation tax = TTP * 19%

56
Q

Augmented profits equation?

A

Augmented profits = TTP + exempt ABGH distributions

Exempt ABGH distributions: dividends received from Uk and overseas non-51% group companies

57
Q

_____ companies should be ignored when looking at related 51% group companies calculations

A

Dormant

58
Q

Large and Very Large company corporate tax instalments= ?

A

1/4 * estimated CURRENT YEAR liability

59
Q

From the beginning of first chargeable accounting period, you have __ months to tell IR that you have got started

A

3

60
Q

When does HMRC send out returns?

A

31 December

61
Q

How long do corporations have to submit a full return?

A

A whole year after the end of the accounting period

62
Q

Repayment interest to taxpayer runs later of ______ or ______

A

Due date

Payment date

63
Q

Can exempt VAT supplies have input VAT recovered?

A

No

64
Q

Historic test for VAT registration?

A

Taxable supplies > £85,000 last 12 months, must register

65
Q

Actual tax point is earlier of ? (3)

A

Goods made available
Payment received
Invoice issued

3) instead of 1) if invoice issued within 14 days

66
Q

Bad debt is available if?

A

Debt > 6 months overdue AND

Bad debt written off in books

67
Q

How long does one have to recover bad debt relief?

A

Within four years of becoming eligible for relief

68
Q

Input VAT can be recovered on the first return if: (2)

A

Goods supplied within 4 years of registration

Services supplied within 6 months of registration

69
Q

Return (VAT 100) is to be returned and payed when?

A

7 calendar days after the last day of the month following the end of the return period

70
Q

How long must companies keep VAT records for?

A

6 years

71
Q

POA due from substantial traders (VAT liability > 2.3m) is what?

A

1/24 * previous year’s total VAT liability paid at end of second and third months in each quarter

72
Q

A simplified VAT invoice can be issued for supplies under _____

A

£250

73
Q

Annual Accounting Scheme: instalments? VAT return and balancing payment?

A

9 * 1/10 * estimate VAT liability (end of months 4-12)

Within 2 months after y/e

74
Q

Expected taxable supplies in following < _____ for Annual accounting scheme?

A

£1.35m

75
Q

Penalty for first late payment of VAT?

A

None, but triggers a surcharge liability notice (SLN) which lasts for next 12 months

76
Q

VAT errors can be corrected next return given that: (2)

A

Was not deliberate

Error was less than £10,000 or 1% * net taxable turnover

77
Q

HMRC can file a notice of intention by: (2)

A

First anniversary of actual submission date

If late, quarter day following first anniversary of actual submission date (31 Jan, 30 April, 31 July, 31 October)

78
Q

Diesels get a ___ supplement, h less told that the car meets ______ standards

A

4%, RDE2

79
Q

Pension advice up to _____ is exempt

A

£500

80
Q

Fuel benefit equation?

A

Benefit= 24,500 * %car benefit

81
Q

Non cash gifts from third parties are exempt if worth less than _____

A

£250

82
Q

Childcare vouchers allowance?

For higher taxpayers?
For additional rate taxpayers?

A

55

28
25

83
Q

A staff party is exempt for the individual so long as the cost in relation to the individual is no more than _____ in the tax year

A

£150

84
Q

Childcare provided by a person’s employer is ______

A

Exempt

85
Q

A benefit provided by a third party is _____ for a person’s tax

A

Exempt

86
Q

If additions and disposals in main pool is less than ______, write off the balance as WDS in place of normal allowances

A

£1,000

87
Q

Employees over retirement age no longer pay Class 1 ______ contributions, but must pay Class 1 ______ contributions

A

Primary, secondary

88
Q

An employee with no supplementary income other than interest will only need to retain their tax return records for ______ year(s) following the tax return submission deadline for the year

A

One

89
Q

For ______, indexation is not available

A

Individuals

90
Q

If a VAT return is late but payment is not, there a default surcharge of _____

A

£0

91
Q

Penalties for late payment do or do not apply to payments on account?

A

They do not

92
Q

VAT is reclaimable on goods and capital assets purchased within ______ years before registration and still held by the business at registration

A

Four

93
Q

VAT on motor cars with any amount of private use is ______

A

Irrecoverable

94
Q

When calculating indexation, the indexation factor must be _______

A

Rounded to 3 decimal places

95
Q

Interest on discovery assessments runs from the _______ until the ________ the tax is paid

A

Due filing date

Day before

96
Q

Does HMRC collect repayments of student loans?

A

Yes

97
Q

If a surcharge is under _____ regarding VAT payments, the surcharge will not be imposed

A

£400

Tax (2 decks)

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