Chapter 1

Question 1

What is an indirect tax

Answer 1

charge levied by the state on goods and services. e.g shop

Question 2

What is a direct tax?

Answer 2

levied by the government directly on a taxpayer e.g income tax

Question 3

indirect tax examples

Answer 3

Tobacco
alcohol
petrol

Question 4

Who has to register for VAT (list 5)

Answer 4

Sole proprietor
a partnership
a company
a club
an association
a charity

Question 5

What is a historic turnover test?

Answer 5

calculated on taxable sales when over £85000. Based on month after month sales.

Question 6

Future turnover test

Answer 6

have to register for vat before you go over the threshold but can de-register if the threshold of £83000 not met have to register for vat before you go over the threshold but can de-register if the threshold of £83000 not met

Question 7

HMRC Penalties

Answer 7

Non-deliberate
Deliberate
Deliberate and concealed

Question 8

2 types of disclosure

Answer 8

Unprompted disclosure
Prompted disclosure

Question 9

What is Potentially Lost Revenue(PLR)

Answer 9

percentage of tax that had been lost due to error being undetected

Question 10

Compliance check examples

Answer 10

Copies of invoices issued
invoices received
credit notes
records of import and exports
records of items on which VAT cant be reclaimed

Question 11

Goods and services charged at a lower rate of 5%

Answer 11

Energy
fuel
renovating buildings

Question 12

Goods and services charged at zero rate

Answer 12

Goods and services charged at zero rate
Equipment for the blind and disabled
prescriptions
construction of new residential buildings
transport for 10 or more people