Question 1

Which of the following is a key factor in determining whether an engagement is

treated as employment or self-employment in tax law?
Response: Nature of the work relationship
Score: 0.5 out of 0.5 Yes

Question 2
Which of the following taxes is considered a direct tax?
Response: Income Tax
Score: 0.5 out of 0.5 Yes

Question 3
What is the Payment on Account system in the UK primarily used for?
Response: Paying income tax in advance
Score: 0.5 out of 0.5 Yes

Question 4
What is the purpose of a tax compliance check in the UK?
Response: To verify the accuracy of tax returns and assess compliance
Score: 0.5 out of 0.5 Yes

Question 5
If a taxpayer expects their income to be significantly lower in the next tax year, what
action should they take regarding their Payment on Account?
Response: Reduce it to reflect the expected lower income
Score: 0.5 out of 0.5 Yes

Question 6
Which of the following is NOT considered a badge of trade when determining
whether an activity constitutes a trade for tax purposes?
Response: Inheritance of assets
Score: 0.5 out of 0.5 Yes

Question 7
What is the primary purpose of the self-assessment system in the UK?
Response: To allow taxpayers to voluntarily assess their own tax liability
Score: 0.5 out of 0.5 Yes

Question 8
In the context of UK tax administration, what does "PAYE" stand for?
Response: Pay As You Earn
Score: 0.5 out of 0.5 Yes

Question 9
What happens if a taxpayer's Payment on Account exceeds their final tax liability for
the year?
Response: The excess is refunded by HMRC.
Score: 0 out of 0.5 No

Question 10
Which of the following factors may influence the choice of accounting date?
Response: Seasonal fluctuations in income
Score: 0.5 out of 0.5 Yes

Question 11
Which tax is primarily collected at the point of sale of goods and services?
Response: Value Added Tax (VAT)
Score: 0.5 out of 0.5 Yes

Question 12
Which of the following is NOT a common function of taxation?
Response: Controlling population growth
Score: 0 out of 0.5 No

Question 13
In the UK, which type of income is typically subject to PAYE (Pay As You Earn) tax
withholding?
Response: Employment income
Score: 0.5 out of 0.5 Yes

Question 14
What is the primary purpose of taxation in a modern economy?
Response: To generate government revenue
Score: 0.5 out of 0.5 Yes

Question 15
Which of the following is NOT generally considered assessable income for tax
purposes?
Response: Child Benefit
Score: 0.5 out of 0.5 Yes
Question 16
For how many years should individuals and companies keep records related to their
tax affairs in the UK?
Response: 7 years
Score: 0.5 out of 0.5 Yes

Question 17
What is the purpose of the "overlap relief" in the closing year of a trade?
Response: To decrease taxable profit
Score: 0.5 out of 0.5 Yes

Question 18
Which of the following is a potential consequence of failing to pay taxes owed in the
UK?
Response: Legal action and fines
Score: 0.5 out of 0.5 Yes

Question 19
Who is typically responsible for conducting tax compliance checks in the UK?
Response: HM Revenue and Customs (HMRC)
Score: 0.5 out of 0.5 Yes

Question 20
Which of the following factors is considered a strong indicator of self-employment in
the context of badges of trade?
Response: . Involvement in speculative transactions
Score: 0.5 out of 0.5 Yes

Question 21
If an individual buys and sells goods as a hobby without the intention of making a
profit, how is it typically treated for tax purposes?
Response: As an investment
Score: 0 out of 0.5 No

Question 22
In the UK, what is the deadline for submitting a self-assessment tax return for the
previous tax year for most individuals?
Response: 31st January
Score: 0.5 out of 0.5 Yes

Question 23
For tax purposes, when does the UK tax year typically start and end?
Response: April 6th to April 5th of the following year
Score: 0.5 out of 0.5 Yes

Question 24
Which of the following is NOT typically considered an allowable deduction for an
employee's tax calculation?
Response: Mortgage interest payments
Score: 0.5 out of 0.5 Yes

Question 25
What is the primary basis of assessment for employment income in the UK?
Response: Tax year
Score: 0.5 out of 0.5 Yes

Question 26
In the UK, what is the statutory approved mileage allowance for the first 10,000
business miles for cars and vans?
Response: £0.45 per mile
Score: 0.5 out of 0.5 Yes

Question 27
Which UK government department is responsible for overall economic policy,
including taxation?
Response: Her majesty's revenue and customs
Score: 0.5 out of 0.5 Yes

Question 28
In calculating tax-adjusted trading profit, which of the following is typically NOT
considered allowable expenditure?
Response: Personal mortgage payments
Score: 0.5 out of 0.5 Yes

Question 29
Taxation is used as a tool to reduce income and wealth inequality in a society. This
purpose is often achieved through:
Response: Progressive taxation
Score: 0.5 out of 0.5 Yes

Question 30
 In the opening year of a trade, which expenses can be treated as allowable
deductions?
Response: Only expenses incurred after trading began
Score: 0 out of 0.5 No