Question Practice

Question 1

VAT on services incurred before registration can be recovered on services supplied in

Answer 1

the 6 months before registration

Question 2

VAT on goods can be recovered on goods supplied within

Answer 2

4 years before registration if supplied for business purposes and are still in the business

Question 3

Is VAT on entertaining suppliers recoverable?

Answer 3

no

Question 4

When does companies first accounting period start

Answer 4

First acquires source of chargeable income to date commences to trade

Question 5

When is a companies second period of account

Answer 5

Date trade commences to end of first POA

Question 6

When is companies third period of account

Answer 6

Same dates as POA

Question 7

IHT - Land and buildings - where located for IHT if ND
L&B

Answer 7

where physically situated

Question 8

IHT - Land and buildings - where located for IHT if ND
Debt

Answer 8

Where the debtor resides

Question 9

IHT - Land and buildings - where located for IHT if ND
Life policies

Answer 9

Where proceeds are payable

Question 10

IHT - Land and buildings - where located for IHT if ND
Registered shares and securities

Answer 10

Where they ar registered

Question 11

IHT - Land and buildings - where located for IHT if ND
Bank accounts

Answer 11

At the branch where the account is kept

Question 12

IHT - Land and buildings - where located for IHT if ND
Interest in partnership

Answer 12

Where partnership business carried on

Question 13

IHT - Land and buildings - where located for IHT if ND
Goodwill

Answer 13

Where the business to which it is attached is carried on

Question 14

IHT - Land and buildings - where located for IHT if ND
Tangible property

Answer 14

At physical location

Question 15

IHT - DTR tax credit is the

Answer 15

lower of foreign tax liability and IHT at average rate on asset

Question 16

IHT if UKD or / Deemed Dom UK assets and overseas assets

Answer 16

UK - assessable
Overseas - Assessable

Question 17

IHT if UK ND UK asset/overseas

Answer 17

UK - Assessable
Overseas - Exempt

Question 18

IHT - Insurance policy on someone else’s life amount to include in death estate is the

Answer 18

Market value

Question 19

IHT - valuing shares at the

Answer 19

lower of the quarter up and average marked bargain

Question 20

IHT Average marked bargain

Answer 20

Lowest + highest / 2

Question 21

VAT on rent / building is normally

Answer 21

Exempt - option to tax on commercial properties

Question 22

VAT on sale/construction of new residential building

Answer 22

Zero rated supply

Question 23

VAT on sale / construction of new commercial building (,3y)

Answer 23

20%

Question 24

If enact option to tax it is in place for

Answer 24

20 Years but there is a 6 month cooling off period

Question 25

Stamp duty is based on

Answer 25

VAT inclusive value

Question 26

Required level of PII

Answer 26

If gross fee income is less than £600,000, then minimum level is 2.5 * gross fee income subject to minimum of £100,000 otherwise minimum is £1.5m

Question 27

How long must PII cover be maintained after retirement

Answer 27

at least two years, preferably for six

Question 28

PCRT - Client specific meaning

Answer 28

tax planning must be specific to particular clients facts and circumstances clients must be alerted to wider risks and implications of any courses of action

Question 29

PCRT - Lawful meaning

Answer 29

Members must act lawfully and with integrity and expect the same from their clients. Tax planning should be based on realistic assessment of facts and credible view of thhe law.

Question 30

PCRT - Disclosure and Transparency

Answer 30

Tax advice must not rely for its effectiveness on HMRC having less than the relevant facts, any disclosure must fairly represent all relevant facts

Question 31

PCRT - Advice on tax planning

Answer 31

Members must not create, encourage or promote tax planning arrangements that set out to achieve results that are contrary to the clear intention of parliament in enacting relevant legislation or are highly artificial/contrived and seek to exploit short comings

Question 32

PCRT - Professional judgement and appropriate documentation

Answer 32

Professional judgement must be exercised notes should be kept with rationale of PJ

Question 33

What are the three scenarios where professional accountant may disclose confidential information

Answer 33

Authorised by client/employer Disclosure is required by law (legal proceedings/AML) Professional duty/right to disclose when not prohibited by law (quality review of prof body, protect own interests in legal proceedings)

Question 34

Conflict of interest - secondment to HMRC - steps to take

Answer 34

secondee not involved in matters relating to the seconding organisation/clients following end of secondment, secondee should not be involved in the affairs of any taxpayer they were involved with at HMRC for a significant period serve interests of HMRC during secondment manage any potential conflicts of interest between HMRC and employer

Question 35

GDPR requirements with processing personal data-

Answer 35

process lawfully, fairly and transparently in relation to individuals Collected for specified, legitimate purposes and not processed further adequate, relevant and limited to what if necessary in relation to purposes for which they are processed accurate, and where necessary kept up to date kept in form which permits identification of individuals for no longer than is necessary processed in manner that ensures appropriate security of personal data

Question 36

Who monitors compliance with UK GDPR

Answer 36

Information Commissioner's Office (ICO

Question 37

A Data protection officer must be appointed for

Answer 37

public authorities, public bodies or organisation carrying out certain types of processing.

Question 38

Organisations handling personal data must notify

Answer 38

the ICO that they are data controller and be added to register of data controllers. Failure to notify is strict liability offence

Question 39

Where there is a breach of data likely to result in a risk to the rights and freedoms of individuals, the breach must be reported

Answer 39

within 72 hours of first coming to light. For organisations, fines can be tiered up to a maximum of 4% of annual global turnover or 20m euros

Question 40

Precautions to prevent unauthorised access to client information on computer

Answer 40

access credentials kept safe from authorised use computers physically secure password changed every 3m or regularly users have own unique log in any unusual / unexpected activity on client HMRC record reported to HMRC suspicious emails appearing to be from HMRC should be forwarded to their phishing team

Question 41

Money laundering definition

Answer 41

possessing or in any way dealing with or concealing proceeds of any crime or terrorist funds

Question 42

MLRO Responsibilities

Answer 42

considering internal reports made to them where there are suspicions of ML If consider to be appropriate, reporting to NCA via external report SAR compile and send the SAR Specific offences for MLRO failing to make a report where needed

Question 43

Defences against failure to report ML

Answer 43

- individual did not know / suspect ML (lack of training - offence on part of employer) - privilege reporting exemption (only where legal advice is given/advice in course of litigation) Reasonable excuse for not making a report (extreme duress and threats to safety) Known/reasonably believed ML taking place outside the UK and not unlawful where taking place

Question 44

Where does privileged exemption apply

Answer 44

Where legal advice is given or advice is given in the course of litigation

Question 45

AML procedures

Answer 45

register with supervisory authroity appoint MLRO and implement internal reporting procedures train staff on legislation and how to recognise and deal with ML and report MLRO have appropriate internal procedures relating to risk assessments and management to deter and prevent ML Carry out Customer DD on new clients and monitor existing clients verify identify of new clients and evidence of identification and records maintained Report suspicions on SAR to NCA

Question 46

How long must records of client identification be maintained after termination of client relationship

Answer 46

five years from date when all activities in relation to transaction were completed

Question 47

What is implication of leaving death estate to spouse who is not UK Dom/Deemed dom

Answer 47

spousal exemption is limited to 325000

Question 48

advantages of VAT group

Answer 48

No VAT due on supplies between them, only one VAT return between them

Question 49

When can non-corporate entity (partner or individual) join a VAT group with corporate subsidiaries

Answer 49

if it controls all members of the VAT group

Question 50

Where is there a SDLT group

Answer 50

where there is 75% shareholding (direct or indirect) between companies Individuals cannot be in the group as they are not companies

Question 51

Sufficient ties - when have substantive UK work

Answer 51

at least 3 hours per day for at least 40 days in the tax year