Income Tax & NIC Chapter 7-12

Question 1

when an asset is disposed of, the pool value decreases by what amount

Answer 1

lower of:
- sale proceeds, and
- original cost

Question 2

what can an FYA be applied on

Answer 2

full first year allowance for new cars with zero emissions

Question 3

can AIA and WDA be time apportioned

Answer 3

yes

Question 4

where is a balancing charge added

Answer 4

to tax adjusted trading profits

Question 5

SBA relief

Answer 5

3%

Question 6

expenditure qualifying for SBA’s

Answer 6

• buildings including offices, warehouses, and wholesale premises, factories and cost of subsequent improvements
• structures including roads, walls, bridges, and tunnels
  qualifying costs do not include land, legal fees, and repairs and maintainance

Question 7

effect on personal allowance due to offsetting losses against total income

Answer 7

PA may be wasted because PA is deducted after losses are deducted from net income

Question 8

when must claim be made to offset losses with total income

Answer 8

jan 31st after the january after tax year (31st jan 2027

Question 9

terminal loss must be claimed by what date

Answer 9

April 5th 2029

Question 10

claim for opening year relief must be made by what date

Answer 10

31st January 2027

Question 11

Limit of maximum deduction from total income

Answer 11

greater of:
- 50,000, or
- 25% of total adjusted income
ATI = net income - PPC

Question 12

what is self-asssesment for filing tax for

Answer 12

for collection of all tax not deducted through PAYE system

Question 13

what does tax return cover

Answer 13

income tax, class 4 NICs, and capital gain tax liabilities for the year

Question 14

how long do taxpayers with businesses need to keep a record of all their documents

Answer 14

5 years from the Jan 31st filing date (31st Jan 2031)

Question 15

how long should normal taxpayers retain records and documents

Answer 15

12 months after Jan 31st filing date (Jan 31st 2027)

Question 16

late payment interest

Answer 16

7.75% pa

Question 17

repayment interest

Answer 17

4.25%

Question 18

penalties for late payments

Answer 18

more than 1 month late - 5%
more than 6 months late - additional 5%
more than 12 months late - addition 5%

Question 19

when must written notice be sent for an HMRC compliance check

Answer 19

12 months of tax return filing - if return is filed late then it must be 12 months from 31st jan, 30 april, 31st july, or 31st Oct whichever is the next after tax is filed

Question 20

penalties for late filing

Answer 20

after due date - 100 pounds
after 3 months - 100 fixed and 10 pounds daily
6 months late - 5% of tax due min 300
more than 12 months (5,70,100 min 300)

Question 21

PAYE payment date

Answer 21

22nd of month