48 John's income tax and capital gains tax liabilities for 2022/23 were £18,200 a n d £4,200 respectively.

y. He paid £5,000 PAYE

and payments o n account for 2022/23 of £6,000.
His income tax liability for 2023/24 is £19,500 and his capital gains tax liability is £6,500.

Requirement
What payment o n account of his 2023/24 tax liability should John have paid o n 31 July 2024?
A £9,750
B £7,250
C £6,600
D £3,000
LO2d

49 Indigo pic filed its corporation tax return for the year e n d e d 31 December 2022 o n 30 November 2023. HMRC wishes to
correct some obvious errors in the return.
Requirement
What is the latest date by which HMRC may make such corrections?
A 31 August 2024
B 30 September 2024
C 30 November 2024
D 31 December 2024
LO 2c

5 0 Pilot Ltd prepa res accou nts to 30 April each year.

Year end Corporation tax due Date return filed Date tax paid

30 April 2022 £35,000 1 2 October 2023 1 5 December 2023

Pilot Ltd also submitted its two previous corporation tax returns late.

Requirement
What is Pilot Ltd's liability t o penalties for the late filing of its corporation tax return for the year ended 3 0 April 2022?
A £200 fixed penalty and n o tax-geared penalty
B £200 fixed penalty and 1 0% tax-geared penalty
C £1,000 fixed penalty and n o tax-geared penalty
D £1,000 fixed penalty and 1 0% tax-geared penalty
LO2e

51 Rand submitted his VAT return for the quarter to 30 June 2025 online, 1 0 days late and paid the VAT due of £5,000 o n that
day. The only other time that he has ever submitted a VAT return late was in his quarter to 31 March 2025.
Requirements
Indicate whether the following statements are true o r false in relation to Rand's exposure to VAT penalties
Rand will incur a late payment penalty of 2% unless h e had applied for a Time To Pay arrangement
A True
B False
Rand will incur a VAT late filing penalty if he submits two more late returns
C True
D False
LO2e
52 Karli set up her business on 1 January 2022. Due to the amount of work she undertook she should have been VAT
registered from 30 June 2023 but she did not notify HMRC until 16 November 2024. The unpaid VAT between 30 June
2023 and 16 November 2024 was £10,800. HMRC does not consider being too busy a reasonable excuse for failure to
register on time.
Requirement
The minimum penalty payable by Karli (assuming HMRC deems the failure to notify not to be deliberate) for late
registration is
A £0
B £1,080
C £2,160
D £3,240
LO2e

53 Which of the following would definitely not constitute a reasonable excuse for late filing of a return?
A Serious illness leading up to the filing date
B Postal disruption
C Failure of a taxpayer's IT systems close to the filing date
D Insufficient funds to pay the tax due
LO2e

54 An employer can use voluntary payrolling to report beneficial loans.

A True
B False
An employer can use voluntary payrolling to report company car benefits.
C True
D False
An employer can use voluntary payrolling to report employer provided living accommodation benefits.
E True
F False
LO2b

55 Companies may keep information to show that they have prepared a complete and correct tax return electronically.
Requirement
A True
B False
LO2a

56.1 Basket Ltd started trading in February 2023, but failed to notify its liability to corporation tax as there was a
misunderstanding between the company and its accountants.
Requirement
Would this constitute a reasonable excuse?
A Yes
B No
 56.2 Basket Ltd received a letter from HMRC reminding it of the need to register. Basket Ltd then notified HMRC of its
liability to register for corporation tax. Notification was made six months late.

Requirement
What is the minimum penalty that Basket Ltd will be liable for?

LO 2c

57 Pen Ltd started trading o n 1 July 2023; it had n o sources of income prior to this date.

Requirement
What is the latest date that Pen Ltd should notify HMRC that it has come within the charge to corporation tax?

LO 2c

58 Paper Ltd prepares accounts to 3 0 September.

Requirement
By what date should the corporation tax return for the year ended 30 September 2023 be submitted?

LO2d

5 9 Novell Ltd has prepared its corporation tax return for the year e n d e d 31 May 2023. It shows taxable total profits of
£800,000. Novel Ltd also received dividends from unconnected companies of £200,000.
Requirement
By what date should its corporation tax b e paid?

LO2d

6 0 Manchester Ltd has prepared its VAT return for the quarter ended 31 August 2023. It is not required to make payments o n
account
Requirement
What date is the VAT return due to HMRC?

LO2d
61 Liverpool Ltd had an annual VAT liability of £3 million for the year ended 31 December 2023.
Requirement
State the amount of VAT d u e and the due date for the first payment in relation to the quarter ended 31 March 2024.

Due date:

Payment: £

LO2d

62 Reading Ltd uses the annual accounting scheme and has done so for many years, making monthly payments. For the year
e n d e d 31 March 2023, its return showed a VAT liability of £100,000, and for the year e n d e d 31 March 2024 it was
£120,000.

Requirements
What is the d u e date for the VAT return for the year e n d e d 31 March 2024?

LO2d
State the due date for the first payment in relation to the year ended 31 March 2024.

LO2d

63 Thorn Ltd, a newly incorporated company, started trading o n 1 September 2023. It prepared its first set of accounts for the
1 2 months to 31 August 2024. Its corporation tax liability for this period is £1 20,000.

Requirement

Thorn Ltd must notify its chargeability to corporation tax by

Thorn Ltd was 10 months late in notifying HMRC of the company's chargeability to tax as it was unaware of its obligation.

Requirement

The maximum penalty for this failure to notify chargeability is £

LO2e

6 4 Jamal started trading o n 1 August 2022, making standard- rated supplies. Due to the value of his supplies, he should have
notified HMRC of his requirement to be registered by 31 December 2022. However, he omitted a number of sales from his
records as h e d i d not want to be VAT-registered. HMRC have been tipped off a n d have written to Jamal about this.
Requirement
What is the minimum penalty to which Jamal will be liable for late notification of liability for registration?

% of potential lost revenue

LO2e
65 Stem Trading Ltd makes up accounts to 31 August each year It is not required to pay corporation tax by instalments.
For the year to 31 August 2022, it had a corporation tax liability of £200,000. Stem Trading Ltd submitted its tax return and
paid its corporation tax for this period on 1 January 2024. This is the fourth consecutive late return.
Requirement
What is the maximum penalty payable by Stem Trading Ltd for the late filing of its corporation tax return?
A £1,000
B £200
C £20,000
D £20,200
LO2e

66 Garage Ltd prepares accounts to 31 January each year, and does not pay corporation tax by instalments. For the year to
31 January 2022, it had a corporation tax liability of £200,000.
Garage Ltd submitted its tax return and paid its corporation tax for this period o n 1 January 2023.
Requirement
What is the interest payable b y Garage Ltd? Assume an interest rate of 6.75% o n late paid corporation tax.

LO2e

67 Red Ltd is a small company with 12 employees. It submitted its Full Payment Submission for the month of April 2023 two
months late.
Requirement
What is the penalty payable in relation to this late submission?

LO2e

68 G Ltd files its corporation tax return for the year ended 31 March 2022 o n 31 March 2023. The return shows taxable total
profits of £560,000. On reviewing the return, you discover a transposition error, and the taxable total profits should have
been shown as £650,000. G Ltd has no associated companies.
Requirement
What is the maximum penalty that HMRC could charge G Ltd for this error?

LO2e
1 4 Scenario-based questions: i n c o m e tax

1 Mildred
During 2023/24, Mildred received interest income of £100 o n a loan she had made to her friend. Dot..
Mildred has been employed part-time by ABC Ltd since 2008. She received the following remuneration package in
2023/24:
• salary £1 5,000 per year;
• free meals offered to all staff in the work canteen, which cost the company £560 for Mildred;
■ pension advice (available to all employees) a t a cost to ABC Ltd of £300; and
■ use of a RDE2 compliant diesel company car since 1 July 2023 with C O 2 emissions of 1 1 5 g/km.
ABC Ltd paid £16,000 for the car although it has a list price of £18,000. Mildred pays for all her private fuel.
Mild red received £ 1 8,900 of di vidends i n Janua ry 2024 from a UK company.
Mildred has also run her own business as a sole trader for many years. Mildred has calculated her taxable trading profits
for 2023/24 to be £30,700.
In arriving at her taxable trading profits, Mildred deducted the following amounts:
• £2,000 for legal and professional fees relating to the acquisition of a new five-year lease of business premises;
• £170 accountancy fees for preparation of annual accounts;
• Mildred's class 2 national insurance liability of £1 79; and
“ £150 of irrecoverable VAT relating to the purchase of stock for which Mildred has lost the VAT invoice.
Requirement
Using the standard format below, compute Mildred's taxable income for 202 3/24.
You should enter a number in each relevant box. If an amount is not taxable enter a zero o r a dash into the relevant box.
Mildred's total taxable income for 2 0 2 3 / 2 4

Non-savings
income Savings income Dividend income

£ £ £

Trading income (W1)

Employment income (W2)

Interest from loan to Dot

Dividends

Net income

Personal allowance

Taxable income

WORKINGS
1 Trading income

Trading profits

Legal and professional fees

Accountancy fees
 Class 2 NIC

VAT re stock purchase

Tax-adjusted trading profits

2 Employment income

Salary

Free meals

Pension advice

Car

Total employment income

LOs 3a, 3c, 3e, 3h

Total: 1 0 marks

2 Elan
Elan received £100 interest income from a building society ISA during 2023/24.
Elan has been employed part-time by DEF Ltd for many years. He received the following remuneration package i n
2023/24:
• salary £21,000 per year;
• a bonus of £1,250 in respect of the year ended 31 March 2023, paid on 31 May 2023;
• mobile phone, costing DEF Ltd £240 per annum; and
• use of a petrol company car which has CO2 emissions of 1 02 g/km, and a list price of £20,000. The company also paid
for all of Elan's private fuel.
Elan received £1 1 2,000 of dividends in January 2024 from a UK company.
Elan has also run his own business as a sole trader for many years. Elan has calculated his taxable trading profits for
2023/24 to b e £44,100. In arriving at his taxable trading profits, Elan deducted the following amounts:
• £1,200 written off as a b a d debt because a customer has g o n e into liquidation;
• £50 parking fines incurred b y an employee while visiting a customer;
■ £600 in respect of entertaining clients at a summer party; and
• £50 paid to a local charity for which Elan received an advertisement for his business in the charity's newsletter.
Requirement
Using the standard format below, compute Elan's taxable income for 2023/24. You should enter a number in each relevant
box. If an amount is not taxable enter a zero or a dash into the relevant box.
Elan’s total taxable income for 2 0 2 3 / 2 4

N on-savings
Income Savings income Dividend income

£ £ £

Trading income (W1 }

Employment income (W2)

ISA interest

Dividends

Net income
 Personal allowance

Taxable income

WORKINGS
1 Trading income

Trading profits

Bad debt written off

Parking fine

Entertaining clients

Donation to charity

Tax-adjusted trading profits

2 Employment income

Salary ___________

Bonus

Mobile phone

Car

Total employment income

LOs 3a, 3c, 3e, 3h

Total: 1 0 marks

3 Becky
Becky received £1 75 of bank interest income during 2023/24.
Becky has been employed part-time by GHI Ltd for several years. She received the following remuneration package in
2023/24:
• salary £16,000 per year;
• pension advice, costing £125 in respect of Becky, and offered to all employees;
• use of a bicycle which cost GHI Ltd £230 for business and private journeys, as provided to all employees; and
• provision of a house owned by GHI Ltd, with an annual value of £12,000. The house cost the company £200,000 in
201 6. The official rate of interest o n 6 April 2023 was 2.25%.
Becky received £7,500 of dividends in December 2023 from an overseas company.
Becky has also run her own business as a sole trader for many years. Becky has calculated her draft taxable trading profits
for 2023/24 to be £19,000. In arriving at her draft taxable trading profits, no account has been taken of the following
amounts as Becky was unsure of the correct treatment:
• £20 parking fine incurred by Becky when visiting a client;
“ £80 Gift Aid donation to a national charity;
• overdraft interest of £160 o n Becky's business bank account; and
• professional fees of £300 incurred i n collecting debts from customers who were slow in paying.
Requirement
Using the standard format below, compute Becky's taxable income for 2023/24. You should enter a number in each
relevant box. If a n amount is not taxable enter a zero o r a dash into the relevant box.