UK Tax Compliance

Question 1

Who in the main falls under the self-assessment system?

Answer 1

Self-employed, company directors, those liable to higher or additional rate tax or in vestment income.

Question 2

What tax is covered under self-assessment?

Answer 2

Tax on income
Class 4 NIs
Those paid be self-employed as a percentage of income
Capital gains tax

Question 3

What are the HMRC looking to bring in?

Answer 3

Online tax accounts

Question 4

How often will the online tax system be assessed and why?

Answer 4

Quaterly because VAT returns are quarterly and large companies do corporation tax quarterly.

Question 5

How were the tax 23/24 tax returns issued? And when?

Answer 5

6th of April
A paper return for people who filled a paper return the year before.
A notice to complete an electronic return if filled electronically.

Question 6

When do paper returns need to be submitted?

Answer 6

Before 31st October 2024.

Question 7

When does payment need to be made for paper returns?

Answer 7

31 January 2025

Question 8

What can be collected on paper returns if they are returned in time?

Answer 8

An underpayment of £3000-£17500 on a sliding scale depending on earnings.

Collected by adjustment to the following years PAYE.

Not available to those not paying PAYE and earning more than £6725 from self-employment.

Question 9

What is the return date for electronic returns?

Answer 9

30th December 2024 if they want to receive underpaid tax from the PAYE tax code.

Question 10

When is the payment date for electronic returns?

Answer 10

31st January 2025. Includes return date if not collecting under paid tax.

Question 11

How long does someone have to submit a late return?

Answer 11

3 months

Question 12

How much is estimated to have been lost from incorrect tax returns?

Answer 12

£8bn each year.

Question 13

What are the payments on account?

Answer 13

Instalments for income tax and NIC4 made by

31st January during the tax year in question.

31st July following the tax year in question.

Question 14

What is the balancing payment?

Answer 14

Instalments for income tax and NIC4 made by 31st January following the tax year in question.
Represents the tax paid on account from actual tax due.
Can involve a refund.
Paid with tax for next year and CGT.

Question 15

Where will no payment be required on self assesment?

Answer 15

Liability for income tax for the proceeding year (net of tax deducted at source) is less than £1000 or where more than 80% full or gross income tax was deducted at source. (PAYE or deduction… no investment.

Question 16

What is due on late payments and uder payments to the HMRC and overpayment from the HMRC?

Answer 16

Interest is broadly linked to the BOE base rate.

Question 17

When are surcharges applied? And how much?

Answer 17

On tax remaining 30 days after (3rd march) and a further charge 6 months after.

5% for each.

Question 18

When are surcharges applied? And how much?

Answer 18

On tax remaining 30 days after (3rd march) and a further charge 6 months after.

5% for each.

Question 19

What are the charges for late submission of a return?

Answer 19

£100 penalty with £10 per day up to a maximum of £1000.

£300 or 5% the outstanding (which ever is higher) for 6 months, still no pay
£500 or 5% for 12 months.

Question 20

What other charges are there?

Answer 20

Charges on carelessness, deliberately concealed resulting in underpaid tax or failure to keep adequate records.

Question 21

When can a return be amended?

Answer 21

Any time up to 12 months from after the deadline for submission even when submitted early.

Question 22

What is one of the more common reasons for submitting amendments?

Answer 22

Where an estimate was used and an accurate figure is used later.

Question 23

What are compliance checks?

Answer 23

Samples the HMRC take to look for suspicious activity.

Question 24

When should HMRC enquires usually be started?

Answer 24

Within 12 months of the date, they receive the tax return.

Fraudulent claims are open-ended.

Question 25

How do employers submit PAYE?

Answer 25

Via the Real Time Information System (RTI)

Question 26

How much free tax can someone on 1257L tax code get?

Answer 26

£12,570

Question 27

How much personal allowance would someone on a K100 tax code get?

Answer 27

None and £1000 income would be double taxed.

Question 28

How does the tax code work?

Answer 28

Number tells the tax free amount letter states how to apply it.

Question 29

When must PAYE be assessed and paid?

Answer 29

Monthly by the employer paid 2 weeks from the end of the tax month (5th of the month), so the 19th.

Electronic payment has 3 extra days.

Question 30

What must an employer do at the end of the tax year?

Answer 30

Acount to the HMRC and provide employees with P11D, P11Db form, and P60 forms.

Question 31

Who gets a P11D form?

Answer 31

Any employee who received a benefit in kind.
The HMRC is also given a copy.

Question 32

What does the P11D show?

Answer 32

The value of benefits is in kind for tax purposes.

Question 33

What does the P11D show?

Answer 33

The value of benefits is in kind for tax purposes.

Question 34

What is the P11Db form?

Answer 34

Filled out where a benefit in kind has NIC liabilities for employer.

Question 35

What date must a P11D and P11Db form be returned?

Answer 35

6th July the following tax year.

Question 36

When must a P60 be issued by?

Answer 36

31st May

Question 37

What does the P60 show?

Answer 37

Earnings recieved
Relevant deductions (excluding pension contributions)

Question 38

Where a director is being paid via PAYE, income tax is due on the earliest of:

Answer 38

The date of the payment
The date of the director becomes entitled to payment
The date the amount is registered on the company books

Question 39

How much tax is charged countries that do not share tax?

Answer 39

35% withholding tax

Question 40

What is the ramsay principle?

Answer 40

Allows couples to get married for tax reasons but doesn’t allow shams.

Question 41

What is DOTAS Disclosure of tax avoidance schemes?

Answer 41

Companies that offer tax-avoidance must register them, and the tax payer must use the code on their tax return.

Question 42

What does DOTAS cover?

Answer 42

Income tax
Corporation tax
National insurance
Inheritance tax

Question 43

What is the affluent compliance team?

Answer 43

A team of around 300 inspectors dedicated to dealing with taxpayers who pay tax at the 45% rate or whose wealth is between £2.5 and £20m.

Question 44

What does the affluent compliance team look at?

Answer 44

Individuals who habitually use tax avoidance schemes covered in DOTAS, who fail to file self-assement on time or who appear to be paying less tax than might be expected.

Question 45

What are some current target groups for amnesty?

Answer 45

Let property campaign
Failure to correct
Tax liability disclosure service
Fraud hotline
Sector targeting

Question 46

What is the general anti-abuse rule (GARR)

Answer 46

Legislation defines what abusive tax arrangements are.