REVISION

QUESTION 31 JOE
Salary of 58,183
Director's Remuneration 58,183
Personal Allowance -12500
Taxable Income 45,683

Income Tax
Basic Rate 37,500 20%
Higher Rate 8,183 40%
Income Tax Liability

Salary of 8,000 Total NSI

8,000 8000
Remuneration 46,170 -
Dividend 54,170 8000
Total -12500 -8000
Less:PA 41,670 -
Taxable Income

Income Tax Nil Rate 2,000

Dividend Income Basic Rate 35,500
Higher Rate 4,170
Income Tax Liability

*No Class 1 NIC as salary below 9,500/8788

Salary of 8,000 Salary of 58,183

4018 10773
Income Tax - 5024
Class 1 NIC Employee - 6817
Class 1 NIC Employer 10,830 -
Corporation Tax 14848 22614
Overall Tax Saving 7766

QUESTION 32 ASHURA
Advantages of choosing 5th April as the Accounting Date
1. The basis period rules will be straightforward.
2. There will be no overlap profits.
3. On cessation, the final basis period will be maximum of 12 months. If a
date earlier in the tax year is chosen, the final basis period will be longer,
upto 23 months with a 30th April year end.

Trading Loss for 9 months period ended 5th April 2020.

Trading Loss -3,300
Less: Pretrading Expense -800
Office Expense -870
Capital Allowance -2960
Revised Tax Adjusted -7,930 Trading Loss

Why not beneficial to claim relief against early years

* The relief for early years will mean claiming relief against 2017/18
where the total income is covered by personal allowance.
If Relief is claimed:
- It will waste personal allowance.
- Therefore there will be no tax saving.

Taxable Income for Ashura

Salary 56,600
Mileage Allowance 340
Professional Subscriptions -320
Health Club - *Not incurred necessarily for business.
Occupational Pension Scheme -2800
Personal Pension Scheme - *Increase Basic Band Width
Total Income 53,820
Less: Loss Relief -7930
Net Income 45,890
Less: Personal Allowance -12500
Taxable Income 33,390

QUESTION 33 MABLE
Tenth Ltd - Taxable Total Profits for 4 month period ended 31 July 2020
Trading Profit 52,400
Add:Balancing Charge 15300
Adjusted Trading Profit 67,700
Property Income 1,500
Chargeable Gain 15,800
Total Profits 85,000
Less: QCDs -800
Taxable Total Profits 84,200

Eleventh Ltd - Tax Adjusted Trading Profit

Operating Profit 122,900
Depreciation 2,580
Amortisation 2,000
Deduction for Lease Premium -1,440
Interest Payable -2,500
Capital Allowances -14,334
Tax Adjusted Trading Profit 109,206

ALISA QUESTION 26-30

QN 26. B
*The historic test is met by 30 September. Alisa should therefore have notified
HMRC by 30 October with regisration effective from 1 November.

QN 27. D
Website Design Services 40
Advertising 36
76
Can recover 6 months of services 456

QN 28. C
Repairs 456
Fuel 624
1080
Reclaim 180 Input
*Whatever the company has spent they can reclaim, but in the OUTPUT they have to use scale charge.

QN 29. 7 May 2021 / Electronic Payment

QN 30. The Customer's VAT Registration Number

KATE LTD AND KITTEN QUESTION 21-25

QN 21.
Factory 138,600
Improvement 23,400
162,000
Indexation Factor 0.439
71118
QN 22. A
 Corporation Tax
Total Profits 65000
Less: Director's Remuneration -58183
Less: Employer's NIC -6817
TTP 0
CT -
7,500 Class 1 NIC - Employee
3,273 164
10,773 4860
5024

SI
-
46,170 Corporation Tax
46,170 Total Profits 65000
-4500 Director's Remuneration -8000
41,670 TTP 57000
CT 10,830

- -
7.5% 2663
32.5% 1355
4018
 Capital Allowance Computation
Special Rate Motor Car Allowances
Additions with no AIA 25,600
Additions with AIA
Laptop 2,600
Less:AIA -2,600 - 2600
Less WDA -1152 0.31 360
2960

d necessarily for business.

asic Band Width

Capital Allowance Computation

TWDV b/f 12,400
Addition - Laptop 1,800
-29500
Balancing Charge -15,300

Chargeable Gain
Disposal Proceeds 180,300
Original Cost -151,334
Indexation Allowance -13,166
Chargeable Gain 15,800

Property Income
Rent Receivable 4,800
Less: Impairment Loss -1,200
Less: Running Cost -2,100
1,500

Lease
Lease Payment 60,000
-16800
43,200
Amount deduction 1440

Capital Allowance Computation Main Pool Allowances

Addition Car CO2 90g/km 12,600
WDA @ 18% -1,134 1,134
Additions qualifying for FYA
Car CO2 40g/km 13,200
FYA @ 100% -13,200 - 13,200
Total Allowances 14334
TWDV c/f - 11,466 -

Jan to April 30,000

May to Aug 40000
70,000
September 15500
85,500

48 Output
ey have to use scale charge.
MAISON LTD
Operating profit 892900
Non-deductible expenditure 22340
Deduction for lease premium -715
Capital allowances -70500
Trading profit 844025
Property business income 28685
Loan interest receivable 1460
Chargeable gains 77985
Taxable total profits 952155
Corporation tax 180909

Working 1 Deduction for lease premium

Premium Paid 44000
Less:44000*2%*(12-1) -9680
Amount assessed on the landlord as income 34320
Apportion 715

Working 2 Capital Allowance

Main Pool
Annual Investment Allowance
Building Costs 0
Ventilation system 6,700
Heating System 3,900
Furniture and Furnishing 33,500
Refrigerator and Microwave cooker 2,600
46700
Working 3 Property Business Income
Rental Income - 31/2/21 18300
Rental Income - 30/4/21 12200
Security Deposit 0
Insurance -1035
Initial Repairs 0
Advertising -780
28685

Working 4 Chargeable Gains

First Property
Gain 109,800
Indexation Allowance
Cost -31815
Enhancement Expenditure 0
Chargeable Gain 77,985

Second Property
Gain 26000
Indexation Allowance
Cost (restricted) -26000
Chargeable Gain 0
23800

46700
 70500

(117000*0.315)
PAPER 4

QUESTION 1
200
3645
3845

QUESTION 2
The First Tier Tribunal deals with straightforward case such as the imposition of fixed
The Upper Tribunal hears appeals against decisions of the First Tier Tribunal.

QUESTION 3 D
Chargeable Gain 31800
Less: AEA -12300
Taxable Gain 19500

Tax
Extend Band 38300

7000 18% 1260

12500 28% 3500
4760

QUESTION 4
Date of Retention 31st July 2026
Maximum Penalty 3000

QUESTION 5
Rent Received 24000
Less: Agent's Fees -2400
Property Business Income 21600
21600*40% 8640
Less: Finance Cost -1900
Income Tax Liability 6740

QUESTION 6
Two

* Accommodation in the UK, in which she spends at least one night in the tax year, and

* Shona's father is not treated as close family (not a spouse/civil partner or child under
She does not have substantive UK work. She is not present in the UK at midnight for a

QUESTION 7 D
In months Total Exempt Chargeable
Actual 24 24 -
Work Overseas 60 60 -
Actual 36 36 -
Any reason 36 36 - 42
Unoccupied 39 - 39 6
Last 9 months 9 9 -
204 165 39

QUESTION 8 B
Income Tax on Trading Income 10,600
Class 2 NIC 159
Class 4 NIC 1800
Capital Gains Tax 4970
17,529
Less: Payment On Account -10350
Balancing Payment 7,179

QUESTION 9
Due Date 28th February 2022 3 Months notice.
Compliance Check 20th February 2023 12 Months notice of the actual fi

QUESTION 10
No of Shares Cost Indexed Cost
July 2010 shares 10000 20000 20000
Add: Indexation to Dec 2017 3800
Rights Issue 5000 12500 12500
Share Pool 15000 32500 36300

QUESTION 11
Gift to a trust 180000
Less: AEA
CY -3000
PY -3000
174000
Less: NRB 325000
Less: CGT 7 years before gift -175000 -150000
24000
Tax at 25% 6000

QUESTION 12
Death Estate 525000
Less: Resident Nil Rate Band -175000
NRB 325000
Less: CGT 7 years before gift -40000 -285000
65000
IHT at 40% 26000

QUESTION 13
1st Jan 19 - 31st Dec 19 66000
By Jan 2020 68600
By Feb 2020 71400
By March 2020 74300
By April 2020 78000
By May 2020 82000
By June 2020 86800 *85000 threshold*

End of June reach the threshold - 1 month to notify

30-Jul-20

QUESTION 14 C,D
Date of Invoice
Total Invoice Price Excluding VAT

QUESTION 15 A
Loss b/f 70000
Utilised in y/e 31.03.21 -50300 Partial Claim Allowed
19700
 the imposition of fixed filing penalties. A
t Tier Tribunal. D
night in the tax year, and more than 90 days spent in the UK in either or both of the previous tw

vil partner or child under the age of 18) so that tie does not apply.
the UK at midnight for at least an equal number of days in the tax year as in any other country.

2020/21
1st POA 31/1/2021 9000
2nd POA 31/7/2021 1350
Balancing Payment 31/1/2022 10350

hs notice.
ths notice of the actual filing date.
both of the previous two tax years.

s in any other country.

JAQUETTA
QUESTION 16
y/e 30.9.20 36000
p/e 31.12.20 6000
Less: Overlap Profit -1800
Trading Income 40200

QUESTION 17 B
Main Pool
TWDV b/f 8,600
Additional 900
9,500
Disposal -7,800
Balancing Allowance 1,700

QUESTION 18
Goodwill 15000
Plant and Machinery - relief for the losss is given through capital allowance
Freehold Shop 7000
Less:AEA -12300
Taxable Gain 9700
CGT at 10% (BADR) 970

QUESTION 19
*Richard started trading on 1st January 2021 = tax year 2020/21.
*2021/22 = second tax year
*Is there a tax year ending on the second year ? No = Actual Basis
6TH APRIL 2021 TO 5TH APRIL 2022

QUESTION 20 A,D
*Early year loss relief against general income in 2018/19 , 2019/20 and 2020/21 in that
*Against general income in 2020/21 and/or 2021/22.
DIGGARY LTD
QUESTION 21 - Sale 1 not in Dec 2020
Sales 35800 - Sale 2 - Dec 2020
Sale to Chang Ltd (no intra group) 460
Output VAT 36260 * 700 TAX POINT ON 2ND JAN 202

QUESTION 22
Entertaining UK customers 0
Entertaining overseas customers 330
Redecoration 0
Wall 2300
Input VAT 2630

QUESTION 23 B
*0% for exports
*Customers pays VAT upon receiving.

QUESTION 24 B,D

QUESTION 25 B,C

CHRISTOPHE
QUESTION 26 No of shares Value
Before Transfer 51% 5100 612000
After Transfer 2% 200 6000
606000
QUESTION 27 D
Proceeds 441000 300 10 3000
Less: Cost -371824 4800 80 384000
69176 5100 387000
QUESTION 28 B,C

QUESTION 29 C
Annual Exemption 2020/21 3000

QUESTION 30 C
304167
gh capital allowance

0 and 2020/21 in that order.

in Dec 2020

OINT ON 2ND JAN 2021