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Tax Question Bank Part 4

The document presents a series of questions related to taxation principles, ethical considerations in accounting, and the functions of HMRC. It covers topics such as VAT rules, sources of tax law, and types of taxation, including progressive and regressive taxation. Additionally, it addresses the responsibilities of individuals and partnerships regarding various taxes.

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0% found this document useful (0 votes)
5 views3 pages

Tax Question Bank Part 4

The document presents a series of questions related to taxation principles, ethical considerations in accounting, and the functions of HMRC. It covers topics such as VAT rules, sources of tax law, and types of taxation, including progressive and regressive taxation. Additionally, it addresses the responsibilities of individuals and partnerships regarding various taxes.

Uploaded by

ngochuongotuon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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17 Lauren is unhappy with an explanation given to her by a client in relation to the current year's accounts.

If she accepts the


explanation and submits the accounts to HMRC she feels that this will compromise the principle of integrity.
Requirement
Which of the following factors is she not required to consider in resolving the ethical conflict?
A The facts that she has uncovered
B The relationship that her firm has with the client
C The client's internal procedures
D Alternative courses of action
LO1g

18 A government is considering abolishing the current VAT rules on all food bought in supermarkets (but not any other shop)
and replacing it with the following form of taxation. Each item bought in the supermarket will be subject to a levy of £0.75.
In other words, a person who purchases 10 items of any value will pay £7.50 in tax.
Requirement
The principle behind the proposed system is the:
A Ability to pay principle
B Value principle
C Unit principle
D Neutrality principle
LO 1b

19 Which of the following is a source of tax law?


A The Budget
B Statutoryinstruments
C HMRC extra-statutory concessions
D HMRC statements of practice
LO 1f
2 Introduction to taxation

1 Which of the following items is never a source of UK tax law?


A The annual Finance Act
B HMRC statements of practice
C Case law
D Statutoryinstruments
LO I f

2 Pauline used to earn £20,000 and paid £3,000 i n income tax per annum. She has recently received a substantial pay rise
and now earns £50,000. Her revised income tax is £10,000.
Requirements
What is the principle o n which this tax system is based?
A Progressive taxation
B Regressive taxation
National insurance contributions are a n example of:
C Direct taxation
D Indirect taxation
LO 1b

3 O n e argument proposed in debates about taxation, is that the cost of collecting tax should b e low in relation to the tax
raised.
Requirements
The principle behind this argument is the:
A Ability to pay principle the tax system should be designed to minimize administrative costs and maximize economic
efficiency. When the cost of collecting tax is low compared to the revenue raised, it indicates that the
B Efficiency principle tax system is operating efficiently.

VAT is an example of:


C Direct taxation
D Indirect taxation
LO 1b
4 Wren is an individual who does not have a trade or business of any kind. Wren is an employee earning £30,000 per year
and a shareholder in Firm Ltd. Wren has heard that the following taxes exist in the UK and is unsure which of them they
pay personally:
(1) Capital gains tax
(2) Corporation tax
(3) Income tax
(4) National insurance contributions
(5) Value added tax
Requirement
Which of the following options correctly identifies which taxes Wren could or does suffer personally?
A Alli of them
B (1), (3) and (4) only
C (1), (3), (4) and (5) only
D (1), (2), (3) and (4) only
LO 1e

5 John and Dana operate a VAT-registered partnership, employing a large number of staff.
Requirement
Which of the following options correctly identifies which taxes the partners are jointly and severally liable for?
(1) Income tax on each partner's share of profits from the partnership
(2) Income tax of employees deducted under the Pay As You Earn (PAYE) system
(3) Employerand employee national insurance contributions payable in respect of their staff
(4) Capital gains tax on each partner's share of partnership gains
(5) VAT as a supplier of goods
A Alli of them
B (1), (2) and (3) only
C (2), (3) and (5) only
D (1), (2), (3) and (5) only
LO 1e

6 Which of the following are functions carried out by HMRC?


(1) Collect and administer direct taxes
(2) Collect and administer indirect taxes
(3) Pay and administer child support payments
(4) Collect repayments of student loans
(5) Pay and administer the state pension
A (1 ) and (2) only
B (1), (2) and (3) only
C (1), (2) and (4) only
D (1), (2), (3) and (5) only
LO 1e

7 Which of the following options is correct regarding case law, as determined by tax cases in court?
A Case law is purely for guidance when interpreting statutory law
B Case law applies for the 12 months following the date of the particular court case
C Case law can be superseded by further statutory legislation
D Case law sets a precedent meaning the law can never be changed
LO I f

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