Taxation

Question 1

Name some taxes

Answer 1

Income
Capital gains 
Corporation
VAT
Inheritance

Question 2

What age is NIC applicable to

Answer 2

16-65

Question 3

What act changed the state pension age

Answer 3

Pensions act 2011

Question 4

Wwho must pay HRMC electronically for payments of NIC

Answer 4

Large companies
250+ people
Payment must be no later than 22nd of the month

Question 5

Whatee the pay requirements for companies with less than 250 employees for NIC?

Answer 5

They can opt to pay electronically
Due date is 22nd of the month if paid electronically
If paid via post payment must reach HMRC by 19th of the month

Question 6

Under what circumstances can employers request to pay NIC quarterly?

Answer 6

If their payments normally amount to

Question 7

Corporation Tax

Answer 7

2015 it was reduced to 20%
Apr ‘17 - Apr ‘19 it was 19%
Apr ‘20+ it is 18%

Question 8

When does a business have to register for VAT

Answer 8

If taxable turnover for previous months is over £85,000 or if they expect it to go over this limit soon

Question 9

What are the return detail on the VAT form that is sent to HMRC quarterly

Answer 9

VAT charged on sales to customer during the period

VAT paid on purchases

Question 10

What different VAT rates are there

Answer 10

Nil
Zero rate 0%
Reduced rate 5%
Standard rate 20%

Question 11

What items are in nil rate

Answer 11

Insurance
Fundraising events by charities
Membership subscriptions

Question 12

What items are covered in zero rate vat

Answer 12

Food but not meal in pubs restaurants or hot takeaways
Books
Childredns clothes
Public transport
Water and sewage

Question 13

What items are covered in reduced rate vat

Answer 13

Installing energy saving materials
Domestic fuel and power
Sanitary hygiene products
Children car seats
Contraception
Certain property renovations

Question 14

Who are capital allowances available to?

Answer 14

Sole traders
Self employed persons
Partnerships
Companies and orgs liable for Corp tax

Question 15

How much can SMEs claim for capital allowances?

Answer 15

100% of the first year allowance up to a limit of £500,000 for plant and machinery

Question 16

When must a business use writing down allowances

Answer 16

It has already claim AIA on items worth a total of more than the AIA amount
The item doesn’t qualify e.g. cars / gifts or assets owned before they were used for business purposes

Question 17

WhT us the Annual investment allowance (AIA)

Answer 17

£200,000 for 12 month periods from Jan ‘16

Question 18

What is capital gains tax

Answer 18

A tax on the profit gains released on the disposal of an asset by individuals, trusts and personal representatives
It is the gain that is taxed, not the money recieved for the asset

Question 19

What is classed as disposal of an asset in the context of CGT

Answer 19

Selling it
Gifting it
Transferring it
Exchanging it
Receiving compensation for it (insurance payouts)

Question 20

What assets are exempt from CGT

Answer 20

Private cars and personal possessions disposed of for less than £6,000

Question 21

What is entrepreneurs relief

Answer 21

Available to individuals and some trustees of settlements (not companies) for
Gains made on the disposal of all or part of a business
Gains made on disposal of assets following the cessation of a business
Gains made by certain individuals who were involved in running the business

Question 22

What is the limit for entrepreneurs relief

Answer 22

£10m is the lifetime limit

CGT is charged at 10% on all qualifying profits

Question 23

Inheritance tax

Answer 23

Tax on an estate when somebody dies subject to certain limits.

Question 24

What is the limit of IHT

Answer 24

£325,000 or if everything is left to a spouse

This can increase to £650,000 for married couples when the second partner dies

Question 25

Tax payment dates

Answer 25

31 Oct - deadline for sending in paper tax returns
31 Jan - filing tax returns online
31 Jan - paying tax due previous year and first payment for the current tax year
31 July - second payment on account

Question 26

SME Corp tax payment is due when

Answer 26

9 months and 1 day after the end of the accounting period

Question 27

Large companies Corp tax payments due

Answer 27

Quarterly basis in months 7 10 13 16 following the start of an accounting period
Made on the 14th day of the month

Question 28

Tax records law

Answer 28

A business must keep records for at least 5 years and 10 months after the end of the tax year by law

Question 29

Important documents

Answer 29

Sale ledger
Purchase ledger
Invoices
Inventory records
Cash books
Bank statements