MINI TEST 3

Principles of taxation

Time allowance: 30 minutes

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Student’s name: ..............................................................................

VIETSOURCING Email: ............................................................................................

TRAINING Tel No: ...........................................................................................
CENTRE

Total Mark:

Good luck to you./.

 MINI TEST 3
Principles of taxation

1 Gold plc sold one of its factories on 1 April 2022 for £1,450,000. The factory originally
cost £356,000 in January 2019. On disposal it paid selling fees of £7,250. At acquisition,
legal fees were £2,000 and stamp duty land tax was £10,680. During its ownership Gold
plc upgraded all the wiring and sewerage pipes in the factory at a cost of £13,000.
What is Gold plc's chargeable gain on this disposal?

Chargeable gain £
2 During the tax year 22/23, Shobha was paid a gross annual salary of £82,700. She also
received taxable benefits valued at £5,400.
What amount of Class 1 NIC will have been suffered by Shobha for the tax year 22/23?
A.£ 6,049
B.£6,149
C.£ 5,400
D. £9,924
3 Identify on which two of the following there is a chargeable gain.
A Joseph gifts his holiday home worth £250,000 to his son on his death
B Grass plc makes a disposal of goodwill (originally purchased in 2004) in one of its
businesses to Lawn Ltd, an unconnected company
C Philip sells a valuable painting worth £25,000
D The Willis partnership sold goodwill worth £150,000 as part of a rearrangement of
the partnership
4 Eleanor originally paid £25,000 for a set of 4 paintings in June 1996.
She sold one painting for £9,000 in January, at that time the remaining paintings were
valued at £31,000.
Eleanor is wealthy and pays income tax at the higher rate. She wishes to sell 3 paintings
for £50,000 to her friend Sam.
What cost will be applicable to the sale to Sam?
A. £19,500
B. £19,375
C.£50,000
D. 31,000
5 Jeena is VAT registered and only makes standard rated supplies. In the quarter to 31
March he had the following transactions: 1) Sales of £30,000 and purchases of goods for
resale of £16,800. Both figures are VAT inclusive. 2) He gave samples of his products to a
potential customer which he would normally sell for £100 (VAT exclusive) How much
VAT is payable by Jeena for the quarter ended 31 March?
A. £ 2,640
B. £ 2,660
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Principles of taxation

C. £ 2,200
D. £ 2,220
6 Door Ltd is registered for VAT and purchased a motor car for use by the managing
director for £21,150 (of which £1,410 was for air conditioning), inclusive of VAT. The car
is also used 20% privately by the sales director.
What is the cost to the company of the vehicle net of any recoverable VAT?

Cost of vehicle £
7 Niamh has been trading for three years but only became VAT registered on 1 March 2023.
Identify whether she is able to reclaim input tax on either of the following costs.
A computer used for the accounts purchased in January 2022 and still in use at 1
March 2023.
A Reclaim
B No reclaim
Telephone bill for the quarter to 30 November 2022.
C Reclaim
D No reclaim
8 Joey is a sole trader selling electric appliances.
On 02/02/2022 he made a sale of appliances to a Reliance Ltd of £30,000 (VAT inclusive).
Here is how the transaction went:
02/02/2022 Deposit of £15,000 received
31/03/2022 Goods delivered
15/04/2022 Invoice issued for goods
30/04/2022 Balance of £15,000 paid for goods.
Joey files his VAT returns quarterly.
On which VAT return will this output VAT be included?
A. 2 x £2,500 on 31/03/2022
B. £2,500 on 31/03/2022 and £2,500 on 30/06/2022
C. 2x £2,500 on 30/06/2022
D. £2,500 on 30/06/2022 and £2,500 on 30/09/2022
9 Grave Ltd is a manufacturing company. The following is an extract of the management
accounts for the quarter to 31 March 2023. All figures exclude VAT.
£ £
Sales (standard rated) 60,000
Sales (zero rated) 20,000
80,000
Purchases 35,000
Wages 10,000
Entertaining UK customers 400
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Principles of taxation

45,400
Net profit 34,600

Purchases are standard rated.

What is the net VAT payable for the quarter? £

10 Which of the following is a feature of the cash accounting scheme?

A Input tax can be recovered before the supplier has been paid
B Automatic bad debt relief is given once a debt has been outstanding for six months
C Actual tax point is not relevant when operating the cash accounting scheme
D Businesses must leave the scheme if the value of supplies in the previous 12 months
exceeds £1,350,000
11 In the year ended 31 March Toffee Ltd had tax adjusted trading profits of £1,200,000. In
addition, Toffee Ltd had property income of £250,000, received dividends of £52,200 and
paid a qualifying donation to a national charity of £7,000. What is the corporation tax
liability of Toffee Ltd for the year ended 31 March?
A. £290,000
B. £300,200
C. £299,040
D. £274,170
12 Dylan has been VAT registered for three years. The flat rate percentage for his type of
business is 6%. The management accounts show the following VAT-exclusive figures for
the quarter to 31 January 2023.
£
Sales 32,000
Purchases and expenses (20,000)
Net profit 12,000
All purchases and expenses are subject to the standard rate of VAT.
If Dylan is in the flat rate scheme his VAT for the quarter is:
A £1,920
B £2,304
If Dylan is not in the flat rate scheme his VAT for the quarter is:
C £2,400
D £2,000
13 You have been given some work to complete, which includes a draft calculation of
taxable total profits for a client, Cars Ltd.
Your manager has asked you to check the following calculation and make any corrections
necessary.
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Principles of taxation

Year ended 31 December 2022 £

Tax adjusted trading profit 50,000
Property income 6,000
Dividends received (net) from Track Ltd 5,400
Interest received 1,800
Taxable total profits 63,200
The amount of interest receivable for the year was £2,000. in addition the company
realised a chargeable gain of £12,000.
What is the correct amount of taxable total profits for Cars Ltd for the year ended 31
December 2022?
A. £58,000
B. £76,000
C. £70,000
D. £69,800
14 You have been given some work to complete, which includes a draft calculation of
taxable total profits for a client, Cars Ltd.
Your manager has asked you to check the following calculation and make any corrections
necessary.
Year ended 31 December 2022 £
Tax adjusted trading profit 50,000
Property income 6,000
Dividends received (net) from Track Ltd 5,400
Interest received 1,800
Taxable total profits 63,200
The amount of interest receivable for the year was £2,000. in addition the company
realised a chargeable gain of £12,000.
What is the correct amount of taxable total profits for Cars Ltd for the year ended 31
December 2022?

15 Jack's tax position for 2022/23 and the previous year is as follows.
2021/22 2022/23
£ £
Total income tax liability 10,100 12,500
Class 4 NIC 3,300 3,450
Capital gains tax 2,300 –
Jack made a payment on account for 2022/23 on 31 January 2023. To avoid any
interest charges you advised that he should make a payment on that date of what
amount?
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Principles of taxation

A £5,050
B £6,700
C £7,850
D £7,975