Tax system

Question 1

When are the first, second and balancing payments on account due for self assessment?

Answer 1

First - 31/1 of the tax year the trading year ends - first 1/2 of previous tax year’s liability
Second - 31/7 of the following tax year - other 1/2 of previous tax year’s liability
Balancing - 31/1 of the following tax year - difference made up/credited

Question 2

In what situation are payments on account not required?

Answer 2

Liability <£1000 OR
>80% of the IT liability from the previous tax year was taken under PAYE

Question 3

By what date must non-residential CGT liabilities be paid?

Answer 3

31/1 following the end of the tax year of the gain

Question 4

What are the fines for late submission?

Answer 4

Miss 31 Jan deadline: £100
3 months late: £10 a day for max £90 days
6 months late: £300 or 5% of tax due
12 months late: £300 or 5% of tax due

Question 5

What are the fines for late payment?

Answer 5

30 days late: 5% of tax due
6 months late: 5% of tax due
12 months late: 5% of tax due

Question 6

Describe the Ramsay principle.

Answer 6

Provides a statutory interpretation in cases involving tax avoidance. Permits courts to look at overall effect of composite transactions, rather than each step in isolation.

Question 7

Whose responsibility is it to identify if a personal service company falls within the IR35 rules?

Answer 7

Client company