CORPORATION TAX
TUTORIAL CLASSES
Mr. Bandish Bundhoo
July 2024
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THE UK TAX SYSTEM
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EXAMPLE 1
Which of the following is NOT a purpose of taxation in a
modern economy?
A. Influencing economic factors such as inflation and
employment levels.
B. Providing incentives for savings and investments.
C. Increasing the disposable income of high-income
earners.
D. Discouraging negative behaviors such as smoking and
drinking alcohol.
THE UK TAX SYSTEM
SOLUTION 1
Which of the following is NOT a purpose of taxation in a
modern economy?
A. Influencing economic factors such as inflation and
employment levels.
B. Providing incentives for savings and investments.
C. Increasing the disposable income of high-income
earners.
D. Discouraging negative behaviors such as smoking and
drinking alcohol.
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Answer:
THE UK TAX SYSTEM
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EXAMPLE 2
Which of the following is an indirect tax?
A Corporation tax
B Capital gains tax
C Income tax
D Value added tax
THE UK TAX SYSTEM
SOLUTION 2
Which of the following is an indirect tax?
A Corporation tax
B Capital gains tax
C Income tax
D Value added tax
Answer:
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D Value added tax
THE UK TAX SYSTEM
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EXAMPLE 3
Which of the following is statutory legislation?
A Case law
B Extra-statutory concession
C HMRC statement of practice
D Income Tax Act 2007
THE UK TAX SYSTEM
SOLUTION 3
Which of the following is statutory legislation?
A Case law
B Extra-statutory concession
C HMRC statement of practice
D Income Tax Act 2007
Answer:
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The correct answer is D
THE UK TAX SYSTEM
EXAMPLE 4
When you are checking a recent tax computation from
HMRC you notice
that they have made an error, which has resulted in your
client receiving
a larger repayment than should have been made.
What actions should you take?
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THE UK TAX SYSTEM
SOLUTION 4
The situation should be carefully reviewed to confirm whether an error has
occurred. The client must be contacted to obtain authorization for
disclosing the error to HMRC.
The client should be informed of the consequences of not disclosing the
error, including potential interest and penalties.
If the client refuses to authorize the disclosure, consider whether the
amount involved is material. If it is material, you must evaluate whether
you can continue to act for the client.
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If you decide it is inappropriate to continue acting for the client, the client
must be informed in writing. Additionally, you should notify HMRC that
you have ceased to act for the client, without providing the reason.
It may also be necessary to report the matter to the National Crime Agency
THE UK TAX SYSTEM
EXAMPLE 5
For each of the following explain whether it is an example of
tax
evasion or tax avoidance.
Selling a capital asset in May 2024 instead of March 2024
to
ensure that the gain is taxed in a later tax year.
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Altering a bill of £700 to read £7,000 so that a larger tax
deduction
is claimed on your tax return.
THE UK TAX SYSTEM
SOLUTION 5
Changing the timing of the sale of an item so as to
delay the tax
charge is tax avoidance. Individuals may also do this to
take
advantage of capital gains tax allowances that are given
each year.
Altering paperwork is tax evasion – submitting false
information.
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Moving funds into a tax-free ISA account is tax
avoidance –
THE UK TAX SYSTEM
EXAMPLE 6
Jacinda, an ACCA member discovers that a client has
deliberately not declared a source of income on their tax
return. Which of the following statements is correct?
A. The member should immediately notify HM Revenue & Customs
of the error.
B. The member should notify the client of the error and explain the
potential consequences before considering ceasing to act.
C. The member must immediately make a report to the National
Crime Agency due to the possibility of money laundering and
notify the client that they have done so.
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D. The member should cease to act for the client if they refuse to
disclose the error and advise HM Revenue & Customs that they
THE UK TAX SYSTEM
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SOLUTION 6
The correct answer is B.
A member cannot breach confidentiality by disclosing a
client's error to
HMRC without the client's permission.
A member should discuss any potential money laundering
with their
firm's Money Laundering Reporting Officer (MLRO), the
MLRO will then
decide whether a transaction should be reported to the
National Crime
THE UK TAX SYSTEM
EXAMPLE 7
Which type of tax is payable on the disposal of certain
capital assets such as property and shares?
A. Income Tax
B. National Insurance Contributions
C. Capital Gains Tax
D. Value Added Tax
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THE UK TAX SYSTEM
SOLUTION 7
Which type of tax is payable on the disposal of certain
capital assets such as property and shares?
A. Income Tax
B. National Insurance Contributions
C. Capital Gains Tax
D. Value Added Tax
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The Answer is C. Capital Gains Tax
THANK YOU