ACCA Tax UK

NOT UK resident if:

1. you were resident in previous 3 years but spent <16 days in the UK in CURRENT tax year
2. NOT resident in previous 3 year and spent <46 days days in the UK in CURRENT tax year
3. working full time overseas and
   1. spend <91 days in UK
   2. <31 work days in UK
   3. no significant break in overseas work

Automatic NOT resident

1. >183 days spent in UK
2. only home is in UK
3. work full-time in UK for any period of 365 days
   1. thereof 75% work days in UK
   2. no significant break

1. Family - UK resident spouse/partner/child <18
2. accommodation - a place available in UK for min 91 days
3. work - substantive work in UK
4. 90-day - spent <90 days in UK in either of the previous 2 years
5. country - spent more time in UK than any other country

1. taxable on WORLDWIDE profit
2. UK resident if:
   1. incorportated in UK
   2. central Mgmt /control in UK

1. tax assessment & collection (& penalties)
2. payment & administration of child benefits & tax credits
3. responsible for min. wage enforcement & recovery of student loans
4. issues tax returns

1. HMRC
2. 1st tier tribunal
3. upper tier tribunal

direct tax decisions must be appealed to HMRC fist.

Before appealing to a tribunal, you can order a a statutory review

HMRC is accountable to the chancellor of Exchequer.

HMRC is operating under the oversight of the Treasury.

HMRC excersie their functions in the name of the crown

• each person liable to UK tax SEPARATELY
• each company liable to tax SEPARATELY (even if member of a group)

within 4 years of:

• tax year (income T. & CGT)
• chargeable acc. period (corp. Tax)
• Tax period (VAT)

No, self-assessment is not possible for Inheritance Tax - HMRC will determine the amount due

• class 1 = by employer & employee
• Class 1A - by employER on taxable benefits (cars/ accommodation etc)
• Class 2 - by selfemployed
• Class 4 - by selfemployed

• amounts are paid on gross amount of earnings (same as in CH)
• 16y - pension age
• NIC are NOT an allowable expense for deduction in tax liability
• Earnings = cash or marketable assets (can be used like cash)
  • NOT benefits/reimbursements

• they DONT stop after pension age
• they attract income/corporation tax relief as trading expense
• attracts employment allowance
• The employment allowance does NOT apply if:
  • director is only employee
  • total employer NIC in previous years >100k

• employER only
• tax exempt benefits are not liable to Class 1/1A nic
• payment deadline: 22july following end of tax year

• for self-employed
• collected via self-assessment
• due by 31. january following tax year
•  

• based on tax-adjusted trading profits
• self-assessment
• if a self-employed individual employs statt to work for them, they can also be liable to class 1 & 1A contributions for their employees

Individuals liable to income tax, C 4 NIC & CGT

They need to:

• complete annual tax return
• calculate their own tax liability
• settle tax by due date

• 31. Oktober following tax year for PAPER RETURNS
• 31. Jan following tax year for DIGITAL RETURNS (=filing date)
  • corrections can be done within 12m. of filing date

think: HMRC needs more time to process paper returns

• 5 years after filing date for persons conducting TRADE / PROPERTY letting business
• everyone else: 1 year filing date
•  

31. January following end of tax year

This applies to:

• class 2 & 4 NIC
• income tax
• CGT

only necessary for Income tax & class 4 NIC.

No p.o.A necessary if:

• If income tax payable + class 4 NIC of previous year <1000
• >80% of income tax payable + class 4 NIC of previous year was settled via PAYE

payments o.A. can be reduced if

• tax payable by self-assessment is expected to be LESS than in previous year

• 1st installment: 31 January DURING tax year
• 2nd installment: 31 July AFTER tax year
• Balancing: 31 January AFTER

• self-assessment tax returns are submitted late
• records are not kept for appropriate time
• failure of notifying HMRC of new sources of income within appropriate time interval

For LATE PAYMENTS:

• interest charges apply
• +surcharges for unpaid balancing amounts
• +additional penalties for unpaid taxes due to incorrect tax return

• Initially: 100
• 3-6 months late: the initial 100 + 10/day penalty for up to 90 days
• 6-12 months late: the initial 100 + 10/day penalty for up to 90 days + the higher of 300 OR 5% of tax due
• >12 months late: the initial 100 + 10/day penalty for up to 90 days + 5% charge + the higher of 300 OR 5% of tax due

max 3000

deadline for information = 5. okt = 6m after tax year end

same penalties apply as for incorrect tax returns

Interest charges:

Interest period = due date - payment date

interest on repayment = original date of payment - repayment order issued

rates are given in exam!

• >30 days unpaid: 5% of tax unpaid (COUNT DAYS)
• >6 months unpaid: + 5% of tax unpaid
• >12 months: +5% of tax

• rates are given in exams

can appeal against:

• amendment to self-assessment
• discovery assessment
• HMRC's right for discovery assessment

No appeal possible against determination of tax owed

30 days

1. Earned income
   1. employment income (PAYE)
      1. pay received
      2. taxable benefits
   2. Pensions - state & private (PAYE)
   3. trading profits from unincorporated trade
      1. adjusted trade profit
   4. property income from furnished holiday L.
      1. gross rent - allowable expenses
2. unearned income
   1. Property income (furnished & unfurnished, exl holiday lettings)
      1. gross rent - allowable expenses

1. interest/bonuses on national savings & investment certificates
2. interest & dividends with an ISA
3. Gaming/lottery/premium bond winnings

if adjusted net income exceeds a certain amount (100'000) P.A is reduced to 0 for every 2 over 100k

ANI = Net income - GROSS pension contributions - GROSS gift aid donations