45 The correct answer is:

C 1 March 2024
From the first day after the e n d of the month following the cumulative turnover exceeding £85,000.
It exceeds the limit at the e n d of January 2024 (5 x £4,900} + ( 6 x £7,700) + £14,400 = £85,100. So VAT registered
from 1 March 2024.

46 The correct answer is:

B 30 January 2024
Future prospects rule - 30 days to notify - 3 0 Ja n uary 2024
The correct answer is:
D 1 January 2024
Future prospects rule - immediate liability to charge VAT - 1 January 2024

47 The correct answer is:

A £12.67
The correct answer is:
C Maddie
Maddie is liable for the VAT that should have been paid on the sale. The consideration received by Maddie is deemed
to b e VAT-inclusive.
Therefore the amount of output VAT payable is £76 x 1 / 6 = £12.67

48 The correct answer is:

B D o not include
The correct answer is:
D D o not include

49 The correct answer is:

C Not recoverable
The correct answer is:
F Not recoverable
(SAMPLE EXAM)

5 0 The correct answer is:

B £192
The tax point for the deposit is 20 February 2024, ie the quarter ended 2 9 February 2024.
£1,150 x 20/120 = £192
The correct answer is:
E £1,725
The tax point for the balance of the invoice is the invoice date (1 March 2024 - i e the quarter e n d e d 31 May 2024).
£10,350 x 20/120 = £1,725
51 The correct answer is:
A £16.67
The correct answers are:
C David
{SAMPLE EXAM)

52 The correct answers are:

B A trader can voluntarily register for VAT if they make only zero-rated supplies.
C A trader making both zero-rated and stand a rd -rated supplies is required to register only if the level of taxable
supplies exceeds the VAT registration limit.
{SAMPLE EXAM)

Output VAT £ 5,912

£29,560 x 2 0 % = £5,912
(SAMPLE EXAM)

54
In put VAT £ 3,030

£(900 + 2,130)
(SAMPLE EXAM)

55 The correct answer is:

C 30 December 2023

Turnover £

January to August (£6,1 50 * 8) 49,200

Septem ber/October 23,000

November 1 3,000

85,200

The VAT registration limit is therefore exceeded at the e n d of November.

{SAMPLE EXAM)

56 The correct answer is:

C £82.83
The VAT-inclusive quarterly scale rate for a car with CO2 emissions between 185 g / k m a n d 1 8 9 g/km is £497: £497 *
1/6 = £82.83
57 The correct answer is:
A Demonstrate to HMRC that he intends to make taxable supplies
A person not required to be registered must b e registered if h e so requests a n d if HMRC is satisfied that h e makes
taxable supplies (standard and/or zero-rated) or is carrying o n a business a n d intends to make taxable supplies.

58 The correct answer is:

A The debtor must be formally insolvent.

5 9 The correct answer is:

A 4 May
As the payment is received before the basic tax point date (IBTPD) ie, dispatch, the date of payment becomes the
actual tax point date. It is worth noting here that the invoice was issued within 1 4 days of the BTPD and this would
then normally have become the tax point unless payment is made before the invoice date.

6 0 The correct answer is:

C £80
VAT in respect of lunches o n business trips is recoverable (£480 x 1/6 = £80)

61 The correct answer is:

C Deregistration will be effective immediately and must be notified by 30 March 2024
Cow pic must deregister as it is n o longer making taxable supplies. A wholly exempt trader cannot be registered for
VAT. The registration will be effective immediately b u t Cow pic has 30 days in which to notify HMRC, ie, by 30 March.

62
£ 192

£1,000 x 96% x 2 0 % = £192

VAT is calculated o n the price of the supply less the maximum discount as the discount is taken up here.

63 The correct answer is:

A Only the goods used in Jacob's house are a taxable supply.

6 4 The correct answers are:

B A VAT invoice must contain certain details including the VAT registration number, the total VAT chargeable and a
description of the goods supplied.
D The VAT invoice is the usual record used to support a recovery of input VAT.
A VAT invoice must b e issued to all taxable customers, but it is not necessary to issue a VAT invoice to non-taxable
customers, although an invoice often is issued in practice.
A simplified invoice may be issued if the VAT-inclusive sale proceeds are not more than £250.
1 2 Value added tax - further aspects

1 The correct answer is:

C 7 May 2024
The correct answer is:
F 7 May 2024
A VAT return is filed electronically and due seven days after the end of the month following the e n d of the return
period. Payment must also be made electronically and the deadline is the same.

2 The correct answer is:

D Two payments of £1 25,000 each and a balancing payment of £650,000
A trader with an annual VAT liability in excess of £2.3 million is known as a 'substantial trader' and is required to make
payments o n account (POA) during each quarter. The POAare made in months two and three of each quarter with a
balancing payment made one month after the quarter end. The payments required from Cornflower pic are:

2 9 February 2024 = 1 / 2 4 * £3,000,000 125,000

31 March 2024 = 1/24 * £3,000,000 125,000

30 April 2024 = balancing payment for the quarter ended 31 March 2024 650,000

900,000

The correct answer is:

C £250
If a simplified VAT invoice is to b e issued, the maximum consideration permitted is £250.

4 The correct answer is:

D She pays her VAT in nine monthly installments starting in April 2023 with a balancing payment and the return
submitted by 2 9 February 2024.

5 The correct answer is:

D £4,500 by 31 May 2024
Nine payments o n account equal to 1/10 of the previous year's VAT liability are made. Any balancing payment and
the VAT return are due two months after the e n d of the year.

6 The correct answer is:

D Both
Taxable persons must keep records of all transactions to support both the output VAT charged a n d the claim for
recoverable input VAT
 7 The correct answer is:
B £1,350,000
The annual accounting scheme is available if the value of taxable supplies (excluding VAT and supplies of capital
items) does not exceed £1,350,000.

8 The correct answer is:

C Each payment on account is 1 / 2 4 of the total VAT liability of the previous year.
Under the VAT payment o n accounts scheme, large traders (VAT annual liability > £2.3 million) make monthly
payments o n account. Within each quarter, VAT equivalent to 1/24 of the previous year's VAT liability is payable in
months two and three. One month after the e n d of each quarter the balance, if any, for that quarter is payable. Thus
for a trader with a March year end, payments will be made from April to March. The payment for April will relate to the
previous quarter and the other 1 1 payments will relate to the current year. The seven day extension does not apply to
the payments o n account scheme.

9 The correct answers are:

B Businesses operating the flat rate scheme apply their sector percentage to total (both taxable and exempt) VAT-
inclusive turnover.
C HMRC may grant exemption from registration to zero-rated traders that have negligible amounts of input VAT.
Businesses with an annual VAT liability in excess of £2.3 million must join the VAT payments on account scheme.
The main advantage of the annual accounting scheme is the need to only file one annual VAT return.
Businesses operating the cash accounting scheme may also join the annual accounting scheme and vice versa.

10 The correct answers are:

A VAT is accounted for o n the basis of cash paid and received rather than o n invoices.
D The scheme is advantageous for businesses offering extended credit to customers.
Bad debts are relieved automatically under the cash accounting scheme because output VAT is not paid to HMRC
until the d e b t is received from the customer.
Businesses making zero-rated supplies only reclaim input tax - the reclaim will not be sooner using cash accounting.
Moreover, businesses making only zero-rated supplies can elect to apply normal VAT accounting in monthly returns in
order to receive their recoverable input VAT earlier.
A business must leave the cash accounting scheme if taxable supplies in the previous 1 2 months exceed £1.6 million
(not £1.35 million).

11 The correct answer is:

B £550,000
Monthly instalments £3 million/24= £125,000
Balance due one month after quarter end = £(800,000 - 1 25,000 - 1 25,000) = £550,000

1 2 The correct answer is:

A VAT must be paid in quarterly or monthly instalments.
Automatic bad d e b t relief is a feature of the cash accounting scheme, not the annual accounting scheme.
The VAT return is due two months after the end of the year. There is n o seven day extension for the annual accounting
scheme.
You can rejoin the scheme b u t not if you have left within the previous 1 2 months.
13 The correct answer is:
C Businesses issue normal tax invoices to customers,
Businesses calculate VAT due as a flat rate percentage of their total VAT inclusive turnover
A limited cost trader may join the scheme but must use a flat rate of 16.5%.
In the first year of VAT registration a flat rate scheme trader gets a 1% discount o n their flat rate, b u t there is n o
obligation to use 16.5% unless the trader is a limited cost trader.

1 4 The correct answer is:

D £1,122
The flat rate percentage is applied to the total (both taxable and exempt) turnover of the business inclusive of VAT, ie,
£8,500 x 1.20 x 11% = £1,122.

1 5 The correct answer is:

D 4 June
Since Gordon is a member of the cash accounting scheme output VAT is accounted for when the payment is received
from the customer.
(SAMPLE EXAM)

1 6 The correct answer is:

D £1,632
Within the fl at rate scheme, output VAT is calculated as the relevant business % x VAT-inclusive turnover, including the
sale of capital items. Therefore Tony's VAT payable to HMRC is £17,000 x 1.20 * 8% = £1,632.

17 The correct answers are:

B A trader using the flat rate scheme may also b e authorised to use the annual accounting scheme.
D Where a customer requires a n invoice, a flat rate trader who makes wholly stand a rd -rated supplies will issue a VAT
invoice showing 20% output tax.
(SAMPLE EXAM)

1 8 The correct answers are:

B Automatic bad d e b t relief is given.
C Output VAT is accounted for when cash is received from the customer.
(SAMPLE EXAM)

19 The correct answer is:

B 16.5%of VAT-inclusive turnover.

20
£ 1,350,000
21 The correct answer is:
C £2,008
As Florence Ltd operates the cash accounting scheme its tax point is the date of payment to suppliers o r the date of
receipt of payment from customers. Hence any input tax which is paid in the quarter is also recoverable in the quarter.
VAT o n the artwork and the marketing literature is therefore recoverable in this quarter. VAT o n the spare machinery
parts will b e recovered in the next quarter.
1 3 Administration of tax

1 The correct answer is:

A 5 October 2023
A taxpayer is required to notify HMRC of the need to complete a self-assessment return by 5 October following the
tax year in which a new source of income is acquired. As Camilla commenced trading in 2022/23 she is required to
notify by 5 October 2023.
{SAMPLE EXAM)

2 The correct answer is:

C 15 March 2025
A taxpayer who wishes to submit a tax return online must d o so by the later of 31 January following the tax year end
and three months from the date the return was issued.

3 The correct answer is:

A Andrew may file a short tax return.
The correct answer is:
C Andrew may file a short tax return.
A taxpayer who is an e m ployee but not a director, a sole trader with a tu mover of less than £35,000 per annum o r a
pensioner is not required to submit a full tax return each year. The taxpayer may however, decide to continue to
submit a full tax return in any event. This is voluntary and not a requirement unless the taxpayer is sent a full return by
HMRC.

4 The correct answer is:

B 31 January 2030
Because he has a business, Edward must keep records (on paper, digitally or as part of a software program) for his
2023/24 tax return until 31 January 2030. Where a taxpayer has a business, records must be kept for five years from
the 31 January following the e n d of the tax year to which they relate.
The correct answer is:
C 31 January 2026
Where a taxpayer is not in business (ie, the records are purely personal), the records must b e kept for one year from
the 31 January following the e n d of the tax year to which they relate, ie, 31 January 2026.

5 The correct answer is:

C 31 January 2025
A return may b e amended for any reason within 12 months of when the return should have been filed, not when it was
actually filed. A return relating to 2022/23 should have been filed b y 31 January 2024. The amendment must
therefore be made b y 31 January 2025.
 6 The correct answer is:
B 31 January 2024, 31 July 2024 and 31 January 2025
A sole trader who is not in their first year is required to make payments o n account. Eugenie must therefore make
payments o n account o n 31 January in the tax year and 31 July following the tax year end. A final balancing payment
is made o n 31 January following the tax year end.

£ 5,500

Harry's payments on account (POA) for 2023/24 will be half of the income tax and Class 4 NICs paid under self-
assessment in 2022/23:

Income tax liabil ity for 2022/23 1 5,000

Less income tax deducted at source (6,000)

9,000

Plus NIC class 4 for 2022/23 2,000

11,000
x 50% 5,500

Payments o n account are not due in respect of capital gains tax.

8 The correct answer is:

C All of the payments were made late a n d will be liable to interest from the d u e date to the day before payment b u t
only the balancing payment is liable to a penalty at 5%.
Sophie's payments should have been made on 31 January 2024, 31 July 2024 and 31 January 2025. They were all late
and will b e liable to interest from the due date to the day before payment. In addition the balancing payment is
potentially liable to a penalty. Where it is paid more than 30 days late (the penalty date), the penalty is 5%. Where it is
paid more than six months after the payment due date, there is a further penalty of 5%.

9 The correct answer is:

C 5 October 2024
A taxpayer is required to notify HMRC of the need to complete a self-assessment return by 5 October following the
tax year in which a new source of income is acquired. As Albert commenced to trade in 2023/24 he is required to
notify by 5 October 2024.

10 The correct answers are:

C By 31 December 2024 if he submits a paper return
E By 31 January 2025 if h e submits the return online
If the taxpayer submits a paper return the usual deadline is 31 October 2024 b u t this is extended if the return is
issued after 31 July 2024. In this case the deadline is three months from the issue of the return, 31 December 2024.
If the taxpayer is to file online, the normal due date for filing the tax return is 31 January following the end of the tax
year.
Where the notice to make a return is issued after 31 October following the end of the tax year, the deadline is
extended to three months after the issue of the notice - not relevant in this case.
11
5 April I 2028

Where the taxpayer has made an incomplete disclosure of facts in their tax return, which is not due to careless or
deliberate behaviour, HMRC has until four years after the end of the tax year to raise a discovery assessment, ie, 5 April
2028 for 2023/24.

1 2 The correct answer is:

A £0
Tax payable for 2022/23

Total tax liability 28,450

Paid at source (23,400)

Balance payable under self-assessment 5,050

The balance payable by self-assessment re 2022/23 is 17.75% (£5,050 * £28,450) of the total income tax liability for
that yean As this is less than 20% of the total tax liability, payments o n account are not required in 2023/24.
Therefore no payment o n account of Harriet's 2023/24 tax liability should have been paid o n 31 July 2024.

13
£ 9,350

The tax due o n 31 January 2024 is calculated as follows.

£ £

Balancing payment for 2022/23

Total tax liability 15,500

Class 4 NICs 3,200

Paid under PAYE (3,800)

Tax paid by self-assessment 14,900

Payments o n account (13,000)

1,900

Payment o n account for 2023/24

50% of tax paid b y self-assessment for 2022/23 (50% * £14,900) 7,450

Tax d u e o n 31 January 2024 9,350

1 4 The correct answer is:

B £190
A penalty of 5% of the tax overdue is payable where income tax. Class 4 NICs and capital gains tax are paid more than
30 days after the d u e date. Penalties d o not, however, apply to payments o n account.
Where the tax is still outstanding six months after the payment due date a further 5% of the tax overdue is charged.
The balancing payment for income tax paid late is £1,500 (£9,500 - £8,000 POA) and the capital gains tax of £2,300 is
also paid late.
Kurt will therefore be liable for a penalty of £190, being 5% of the total amount paid late of £3,800 (£1,500 + £2,300),
which was d u e o n 31 January 2024.
{SAMPLE EXAM)
1 5 The correct answer is:
B False
Interest runs from the due payment date (31 January 2024 for 2022/23) until the day before the tax is paid. The first
statement is therefore not true.
The correct answer is:
C True
A penalty of £75, being 5% of £1,500, will apply to the additional tax arising. The second statement is therefore true.

1 6 The correct answer is:

B False
An appeal against a discovery assessment must be made in writing within 30 days of the date of the assessment.
Therefore the statement is not true.
The correct answer is:
D False
An internal review is optional.
The correct answer is:
E True
{SAMPLE EXAM)

17 The correct answer is:

B 5 October 2024
Where HMRC does not issue a tax return it must be notified of chargeable gains arising by 5 October following the
e n d of the tax year in which the gain arose.

1 8 The correct answer is:

C 5 April 2044
HMRC may raise a discovery assessment where full disclosure has not been made either due to negligence or fraud at
anytime up until 20 years after the e n d of the tax year.

19 The correct answers are:

B Before the d e b t is recovered, there will b e period when Felicity can object to the recovery.
D HMRC must be satisfied that Felicity is aware that the sum is due.
HMRC can recover the debt in this way if it is at least £1,000.
Felicity must b e left with at least £5,000 in her accounts after the debt recovery.
2 0 The correct answer is:
A £0
Tax payable for 2022/23

Total income tax liability 23,200

Paid under PAYE (19,000)

Balance payable under self-assessment 4,200

The balance payable by self-assessment re 2022/23 is 18.1% (£4,200 + £23,200) of the total income tax liability for
that year. As this is less than 20% of the total tax liability, payments o n account are not required in 2023/24.
Payments on account are not required in respect of capital gains tax. Capital gains tax is settled via one payment o n
the 31 January following the e n d of the tax year.
Therefore no payment o n account of Greg's 2023/24 liability should have been paid o n 31 July 2024.

21
£ 9,700

Tax payable for 2022/23

Total income tax liability 12,100

Class 4 NIC 3,400

Tax deducted at source (300)

Balance payable under self-assessment 1 5,200

Two equal payments o n account of 50% of the previous year's tax paid by self-assessment are due o n 31 January 2024
and 31 July 2024 in respect of 2023/24.
By 31 July 2024 Harold should have paid 100% of the previous year's tax due by self-assessment, ie, £15,200. As he has
only paid £5,500 to date he should pay the balance of £9,700 o n 31 July 2024 in order to minimise any interest charges.

22 The correct answer is:

B £100
Ingrid should have submitted her 2022/23 tax return o n 31 January 2024. A fixed penalty of £100 is due as it was
submitted less than three months late.
The second payment o n account was paid o n 31 August 2023. The payment was due o n 31 July 2023; however, n o
penalties are due o n late payments o n account.
Ingrid paid the final balancing payment for 2022/23 on 1 5 February 2024, 1 5 days late. Interest will be due but n o
penalty is d u e as the tax was not outstanding more than 30 days after the d u e date.

23 The correct answer is:

C 28 February 2025
The normal due date for filing a paper return is 31 October following the end of the tax year. However, where the
notice to make a return is issued after 31 July following the e n d of the tax year, the deadline is extended to three
months after the issue of the notice ie, 28 February 2025.
The correct answer is:
F 28 February 2025
The due date for filing online is 31 January following the end of the tax year o r three months after the issue of the
notice, ie, 2 8 February 2025.
(SAMPLE EXAM)
2 4 The correct answer is:
A 31 January 2025
The balancing payment is due by the 31 January following the tax year, ie, 31 January 2025,
The correct answer is:
F 10 June 2025
HMRC may amend the return up to nine months from its actual filing, ie, until 1 0 June 2025,
{SAMPLE EXAM)

25 The correct answer is:

B 22 April 2023
PAYE is payable electronically 1 7 days after the end of each tax month. The last month of the tax year ends o n 5 April
2023. It is therefore due by 22 April 2023.
The correct answer is:
D 6 July 2023
P1 1 D forms are d u e to be submitted to both HMRC and given to the employees by 6 July following the tax year end.

26 The correct answer is:

B Form issued when an employee leaves employment
The correct answer is:
D End of year summary of tax and NICs per employee to b e issued to each employee
An end of year summary of tax a n d NIICs deducted in the year per employee to be issued to each employee is a P60

27 The correct answer is:

A 30% potential lost revenue
The fine for filing a n incorrect P1 1D, with careless inaccuracies is 30% of potential lost revenue.
The correct answer is:
C £300 per return
The i nitial penalty for filing a late P1 1 D is £300 per return .

28 The correct answer is:

B 31 May

2 9 The correct answer is:

A 6 July 2024
The correct answer is:
D 31 May 2024
{SAMPLE EXAM)

3 0 The correct answer is:

C 31 December 2026
A claim for 'overpayment relief must be made within four years of the e n d of the accounting period.
31 The correct answer is:
D 30 April 2025
Where a return is filed late, HMRC has the right to give notice of its intention to conduct an enquiry into a return for 12
months from the next quarter date of actual submission. The quarter dates are 31 January, 3 0 April, 31 July, a n d 31
October. The return should have been filed within 12 months of the period of account e n dr ie, by 31 December 2023.
As Azure pic filed its return late o n 29 February 2024, the next quarter date is 30 April 2024, so the anniversary of that
date is 3 0 April 2025.

32 The correct answer is:

B £200
The return should have been filed within 12 months of the end of the accounting period, ie, 31 August 2023. As the
return is more than three months late, there is a fixed penalty of £200.
The correct answer is:
C 10% of tax unpaid at 29 February 2024
There is also a tax-geared penalty as the return was submitted more than 1 8 months but less than 2 4 months after the
e n d of the return period and tax was outstanding at the 18-month p o i n t The penalty is 10% of the unpaid tax.

33 The correct answer is:

C 31 March 2030
The correct answer is:
E 31 January 2030
A company must keep its records for six years from the end of the accounting period. An individual must keep their
business records for five years from 31 January following the tax year.
(SAMPLE EXAM)

3 4 The correct answer is:

D £0
The failure to register is not deliberate so there is a maximum penalty of 30% of potential lost revenue.
Edmund registers within 12 months of when he should have and pays the tax due at that time. Therefore, the penalty
may be reduced to zero.

35 The correct answers are:

C Daniel's full income tax return for 2023/24 received o n 4 July 2024 should b e submitted to HMRC b y 31 October
2024, if he submits a paper return.
E Frank Ltd's P11 Ds for 2023/24 should b e submitted to HMRC by 6 July 2024.
A VAT return must b e submitted electronically seven calendar days after the last day of the month following the e n d
of the return period, ie, 7 April 2024.
The partnership income tax return has to b e submitted online by the later of 31 January following the tax year o r three
months from receiving the return - in this case by 3 February 2025.
Eagle Ltd has one year from the e n d of the period of account to submit its corporation tax return, ie, by 31 December
2024.
36 The correct answer is:
B £200
As payment was made more than 16 days late but less than 30 days late, a late payment penalty of 2% will apply.
The correct answer is:
D £0
N o late filing penalty will be due asTalia has not yet reached the points threshold for quarterly returns of 4 points.

37 The correct answer is:

D £18,740
Young Ltd will be liable to a first penalty of 2% of the amount outstanding at the end of day 15, (£450,000) plus a
further 2% of the amount outstanding at the e n d of day 30 (£450,000). As the payment was made more than 30 days
late, a second penalty will arise from day 31 onwards at an annual rate of 4%.
£450,000 x (2% + 2%) = £1 8,000
£450,000 x 4% x 1 5/365 = £740

38 The correct answers are:

A A late payment penalty of 2% of £250,000
E Late payment interest o n £50,000 for 2 0 days and o n £200,000 for 70 days
As O l d Ltd d i d not apply for the TTP arrangement until the VAT was 20 days overdue, the first late payment penalty
will apply to the amount outstanding at Day 15 (£250,000). N o further penalty will arise i n respect of the £200,000
outstanding at Day 30 as the TTP arrangement had been applied for by then (and was subsequently agreed).
Interest applies to late paid VAT irrespective of the existence of a TTP arrangement.

3 9 The correct answer is:

A Careless
The correct answer is:
F 0% of potential lost revenue
The disclosure to HMRC is unprompted and therefore the penalty can be reduced to 0% of potential lost revenue.
(SAMPLE EXAM)

40 The correct answer is:

D A correction cannot be made in the next VAT return because the error exceeds £50,000.
The reporting error threshold is the higher of £10,000 and 1% of turnover (£5,6 million © 1% = £56,000), subject to an
overall maximum of £50,000.
The error must therefore be disclosed t o HMRC rather than adjusted for in the next return.

41 The correct answer is:

C £2,100
Ethel has made a deliberate but not concealed error. The maximum penalty would b e 70% of potential lost revenue.
Ethel's prompted disclosure means that the penalty can be reduced to 35% of potential lost revenue.
Potential lost revenue is:
£15,000 x 40% = £6,000
Therefore 35% * £6,000 = £2,100
(SAMPLE EXAM)
42 The correct answer is:
D £46
As this is the third late payment in the tax year the penalty is 1% of the tax unpaid.

43 The correct answer is:

A True
The correct answer is:
D False
A taxpayer has n o right of appeal against an inspection notice

44 The correct answer is:

A 31 December 2024
The filing date for a corporation tax return is 12 months after the e n d of the accounting period.
The correct answer is:
D 1 4 December 2023
Krone Ltd is a very large company for the purposes of corporation tax payments and the earlier payment dates which
apply to such companies mean that for the year ended 31 December 2023, Krone Ltd will have paid its corporation
tax o n 14March 202 3, 1 4 June 2023, 1 4 September 2023 and 1 4 Decern ber 2023.

45 The correct answer is:

D 31 January 2030
Five years after the 31 January following 2023/24 (five years after 31 January 2025)

46 The correct answer is:

A 606L

Personal allowance 12,570

Less taxable benefits (5,278)

Less underpaid tax {£246 * 100/20) (1,230)

6,062

PAYE code 606L

47 The correct answers are:
A Elaine can amend her tax return o n 1 5 December 2025.
C Elaine can make a claim for overpayment relief because there is an error in her return o n 31 December 2027.
A taxpayer can amend their tax return a n y t i m e before 12 months after 31 January following the tax year, ie, before
31 January 2026 for a 2023/24 return issued o n 6 May 2024. Elaine can therefore amend her tax return o n 1 5
December 2025. HMRC can correct any obvious errors o r mistakes in a taxpayer’s tax return within nine months of the
date the return is filed, ie, 1 September 2025 for a return filed o n 1 December 2024. HMRC cannot therefore correct
an arithmetical error in Elaine's return o n 2 9 September 2025.
A taxpayer can make a claim for overpayment relief within four years of the end of the tax year, ie, before 5 April 2028
for 2023/24. Elaine can therefore make a claim o n 31 December 2027 that there is a n error in her return. HMRC can
give notice of an enquiry into a return until 12 months after the actual filing date of the return ie, 12 months after 1
December 2024. Therefore notice cannot b e given o n 20 December 2025.

48 The correct answer is:

C £6,600
Tax payable for 2022/23

£ £

Total income tax liability 18,200

Paid under PAYE (5,000)

Balance paid by self-assessment 13,200

Payment o n account for 2023/24 d u e 31 July 2024

50% of tax paid by self-assessment for 2022/23

(50% x £13,200) 6,600

Payments o n account are not required in respect of capital gains tax. Capital gains tax is settled via one payment o n
31 January following the e n d of the tax year.

49 The correct answer is:

A 31 August 2024
HMRC has the right to amend a corporation tax return for obvious errors or omissions for nine months from the date
the return is actually filed, ie, from 30 November 2023.

5 0 The correct answer is:

C £1,000 fixed penalty and n o tax-geared penalty
The return should have been filed within 12 months of the period of account end, ie, 30 April 2023. As the return is
more than three months late, there would usually be a £200 fixed penalty. However as this is the third consecutive late
return (persistent failure), this is increased to £1,000.
There is n o tax-geared penalty as the return was submitted within 1 8 months of the e n d of the return period (31
October 2023). The fact that there was tax unpaid at the 18 month point does not alone give rise to a late filing
penalty.
51 The correct answer is:
B False
N o penalty is payable because Rand paid the VAT in full before it was 1 5 days late.
The correct answer is:
D False
Rand's points threshold is 4, as h e files quarterly returns. A late filling penalty will only be incurred if he files a further
late return after having reached the points threshold. He currently has two points, so another three late returns would
b e needed (with none of the points having expired) to incur a penalty.

52 The correct answer is:

B £1,080
The maximum penalty for a 'not deliberate' failure to notify is 30% of potential lost revenue of £10,800.
As HMRC has been notified of the need to register the penalty can b e reduced. The tax was unpaid for more than 12
months so the penalty can be reduced to a minimum of 10% of £10,800, ie, £1,080.

53 The correct answer is:

D Insufficient funds to pay the tax due

5 4 The correct answer is:

B False
The correct answer is:
C True
The correct answer is:
F False
An employer can use voluntary payrolling to report all benefits excluding employer provided living accommodation
and beneficial loans.

55 The correct answer is:

A True

56.1 The correct answer is:

B No
56.2
10 %

Not deliberate, prompted disclosure, <12m = 10% minimum penalty.

57
1 October 2023

Companies must give written notice to HMRC within three months of the start o f t h e first accounting period.
58
3 0 September 2024

Corporation tax returns are due within 12 months of the e n d of the period of account

59
1 March 2024

Augmented profits are below £1,500,000, so the due date for payment is 9 months and 1 day after the e n d of the
accounting period.

60
7 October 2023

Payment of quarterly VAT is d u e one month and seven days after the end of the VAT period i e 7 October 2023.

61
Due date: 29 February 2024

Payment: £ 125,000

Substantial traders are taxable persons with an annual VAT liability in excess of £2.3 million. A substantial trader must
make payments o n account of VAT for each quarter. Payment is due at the e n d of the second and third months of the
quarter, with a balancing payment at the end of the month following the e n d of the quarter.
Each payment is 1/24 of the total VAT liability of the previous year. 1 / 2 4 * £3 million = £125,000.

31 May 2024

Under the annual accounting scheme, the VAT return is due within two months of the e n d of the year.

31 July 2023

Payments o n account are due at the end of month four, and then every month after that.

63
Thorn Ltd must notify its chargeability to corporation tax by 1 December 2023

The maximum penalty for this failure to notify chargeability is £ 36,000

The failure does not appear to be deliberate, so the maximum penalty is 30% of the potential lost revenue of £120,000.

64
5 0 % of potential lost revenue

Deliberate and concealed action, prompted disclosure

65 The correct answer is:
A £1,000
Tax return should have been submitted by 31 August 2023. The return was therefore four months late. As this is a
persistent failure, a fixed penalty of £1,000 applies. The return was not filed more than 13 months after the e n d of the
return period, so n o tax-geared penalty applies.

66
£2,256

Corporation tax due 1 November 2022, paid 1 January 2023, so 61 days late (2 Nov 22 to 1 Jan 23}.
Interest 61/365 * £200,000 x 6.75% = £2,256

67
£200

As Red Ltd has between 10 a n d 49 employees, the late filing penalty will be £200.

68
£ 6,750

The potential lost revenue as a result of G Ltd's error is (650,000 - 560,000) * 25% (corporation tax) = £22,500.
The error is careless so the maximum penalty is 30% * £22,500 = £6,750
1 4 Scenario-based questions: i n c o m e tax

1 Mildred
Marking guide Marks

Income tax computation

Interest from loan to Dot and dividends 1
Personal allowance 1
Working 1 -Trading income
Legal a n d professional fees 1
Accou ntancy fees 1
Class 2 NIC 1
VAT re stock purchase 1
Working 2 - Employment income
Free meals 1
Pension advice 1
Car 2
10
Total 10

Mildred's total taxable income for 2 0 2 3 / 2 4

Non-savings
income Savings income Dividend income

£ £ £

Trading income (W1) 32,879

Employment income (W2) 18,780

Interest from loan to Dot 100

Dividends 18,900

Net income 51,659 100 18,900

Personal allowance (12,570)

Taxable income 39,089 100 18,900

WORKINGS
1 Trading income

Trading profits 30,700

Legal and professional fees 2,000

Accountancy fees 0

Class 2 NIC 179

VAT re stock purchase 0

Tax-adjusted trading profits 32,879