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ACC 3013 Taxation Revision

The document contains a revision section on taxation with multiple choice questions and a problem solving question requiring calculation of tax liability. It provides information on the structure of the UK tax system, types of taxes, sources of tax law, and factors affecting tax policy. It also includes a question calculating tax owed given various sources of income.

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30 views4 pages

ACC 3013 Taxation Revision

The document contains a revision section on taxation with multiple choice questions and a problem solving question requiring calculation of tax liability. It provides information on the structure of the UK tax system, types of taxes, sources of tax law, and factors affecting tax policy. It also includes a question calculating tax owed given various sources of income.

Uploaded by

falnuaimi001
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACC 3013 Taxation Revision

SECTION 1 - Multiple Choice Questions (5 x 2 marks each = 10 marks)

Please select ONE answer from the choice of answers presented in the multiple-choice questions below.

The overall structure of the UK tax system


1. Tax Tribunal, hears tax appeals and made up of two tiers, which of the following deals with most
cases other than complex cases:
a) First Tier Tribunal
b) Upper Tribunal
c) Second Tribunal
d) All of the above

Different types of taxes


2. The different types of taxes in the UK Taxation System includes the following:
a) Income Tax
b) Value Added Tax (VAT)
c) Inheritance Tax
d) Corporation Tax
e) All the above

Different types of taxes


3. The type of Taxes paid by the consumers to the suppliers of goods and services who then pass the
tax to the government is:
a) Direct Taxes
b) Indirect Taxes
c) Family Taxes
d) Company Taxes
e) None of the above

Principal sources of revenue law

4. UK tax law has developed over the course of time from several sources. One important source of UK
Tax law is Case law. Case law relates to:

f) Regulations issued periodically from the local municipalities


g) Law that has been set by the UK Parliament
h) Law that has been set by the European Union (EC)
i) Law developed over time due to tax disputes between tax authorities and individuals and
entities
j) None of the above

1
The Overall function and purpose of taxation in a modern economy
5. Several factors that may affect government’s tax policies are classified into three
classifications such as:
a) Economic Factors
b) Environmental Factors
c) Social Factors
d) All of the above

SECTION 2 – Problem Solving Question


Answer the following question that relate to employment income and require you to calculate
the taxable income and the ensuing tax liability for an individual who is taxable under UK law.

Taxable income and tax liability for individuals


Hamad is a UK tax payer. His earnings in 2019/20 were as follows:
£
Employment income 67,000
Bank deposit income 7,200
Dividends income 12,200

Hamad made a gift aid donation of 2,200 in Dec. 2019

Required: Calculate the tax payable by Hamad for 2019/2020

Non-
Savings
Source of income Savings Dividends Total
Income
Income

Total Income
Gift aid donation adjustment:

Tax on Non-Savings Income:

2
Total

Tax on Savings Income:

Total

Tax on Dividends Income:

Total

Total Tax Liability

Answer:

Non-Savings Savings Dividend


Source of income Total
Income Income s

Employment Income 67,000 67,000


Interest received 7,200 7,200
Dividends 12,200 12,200
PA (12,500) (12,500)
Total Income 54,500 7,200 12,200 73,900

Gift aid donation adjustment: W1


2200 x 100/80 2,750
37,500 + 2,750 = 40,250 Basic Rate
150,000 + 2,750 = 152,750 Higher Rate

Tax on Non-Savings Income


40,250 x 20% = 8,050
54,500- 40,250 = 5,700
Total 13,750

Tax on Savings Income


500 x 0% = 0
(7,200 - 500) x 40% = 2,680
Total 2,680

3
Tax on Dividends Income
2,000 x 0% = 0
(12,200 - 2,000) x 40% = 4,080
Total 4,080

Total Tax Liability 20,510

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