Question 1: (10 points): A1, A3, D4
1. As an accountant working for an accounting firm. A few weeks ago. You prepared a tax return for the client. The client has now told you that he forgot to include some bank interest in the return but that he does not intend to notify HMRC of the omission.
Which of the following actions you as an accountant should take?
(1) Inform HMRC that your firm is no longer acting for this client
(2) Inform HMRC about the clients omission details.
(3) Inform the client in writing that is not possible for your firm to act for him
(4) Report to your firms money laundering reporting officer the clients refusal to disclose omission to HMRC and the facts surrounding it.
o 1, 3 and 4
o 1,2 and 4
o 2,3 and 4
o 1, 2 and 3
2. You are a tax advisor for the following clients:
(1) Sam who is computer systems advisor. He works in London office one day a week and spends the rest of his time visiting clients in oxford and Bath.
(2) Melissa, who works for accountancy firm. She is based in Southampton office but has been seconded to the London for 11 months.
(3) Dana, who works permanently in the same Southampton office as Melissa. She occasionally travels from home to visit a client in London.
Which of your clients can claim tax relief for travelling expenses between home and London?
o Sam
o Sam and Melissa
o Dana and Melissa
3. Lara was provided with a company apartment in February 2020 the annual value of the
apartment is 1,200. The property cost her employer 125,000. But was valued at 150,000 in February 2020. Lara paid rent of 500 in each tax year.
Required
What is the taxable benefit for 2020/21? assuming.
(a) Laras employer purchased property in 2018.
o 1,125
o 700
o 1825
o 2,388
(b) Laras employer purchased property in 2012.
o 1,125
o 700
o 1825
o 2,388
4. Simon Ltd started trading on 1 December 2018 and prepared its first set of accounts to 31 March 2020.
What are Simon accounting period for the period of account to 31 March 2020?
o 1 December 2018 to 30 November 2019 and 1 December 2019 to 31 March 2020.
o 1 December 2018 to 5 April 2019 and 6 April 2019 to 31 March 2020.
o 1 December 2018 to 31 March 2020.
5. Alma holds 80% of NBB Ltd unquoted companies. she gives 20% holding to her daughter.
Shares holding on this date were valued at:
80% 450,0000
60% 300,000
20% 100,000
Required
What is the value for IHT and capital gain tax (CGT) purposes?
o IHT: 100,000, CGT:100,000
o IHT 150,000, CGT: 300,000
o IHT: 150,00, CGT: 100,000
5. Arabella registered her Business for value-add tax (VAT). For the quarter ended 31 March 2021. The input VAT incurred on his purchases and expenses included the following:
Purchase of new computers for the Business | |
Purchase of cleaning supplies for the business | |
Purchase a new motor car for the private use by one of Arabellas employee | |
What is the amount of input VAT recoverable by Arabella in the quarter ended 31 March 2021 in respect of the new computers, cleaning supplies and motor car ?
o 950
o 4950
o 0
6. Sarah is working as a secretary in UK embassy in Bahrain. She has job-related accommodation is cost 250,000 with an annual value of 2,700. What is the total taxable accommodation benefit for the tax year 2020/21?
o 175,000
o 4,000
o 0
o 6,638
7. Which of the following are not revenue taxes?
(1) Income tax
(2) National insurance
(3) Inheritance tax
(4) Capital gain tax
o 1 and 2
o 3 and 4
o 2 and 4
o 1 and 3
9. Tax avoidance is Legal
oTrue
oFalse
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