4 Pi Casso has been a self-employed artist since 1990, making up her accounts to 30 June. Pi’s tax liabilities for the
tax years 2005–06, 2006–07 and 2007–08 are as follows:
2005–06 2006–07 2007–08
£ £ £
Income tax liability 3,240 4,100 2,730
Class 2 national insurance contributions 109 109 114
Class 4 national insurance contributions 1,240 1,480 990
Capital gains tax liability – 4,880 –
No income tax has been deducted at source.
Required:
(a) Prepare a schedule showing the payments on account and balancing payments that Pi will have made or will
have to make during the period from 1 July 2007 to 31 March 2009, assuming that Pi makes any
appropriate claims to reduce her payments on account.
Note: your answer should clearly identify the relevant due date of each payment. (7 marks)
(b) State the implications if Pi had made a claim to reduce her payments on account for the tax year 2007–08
to nil. (2 marks)
(c) Advise Pi of the latest date by which her self-assessment tax return for the tax year 2007–08 should be
submitted if she wants HM Revenue and Customs (HMRC) to prepare the self-assessment tax computation
on her behalf. (3 marks)
(d) State the date by which HMRC will have to notify Pi if they intend to enquire into her self-assessment tax
return for the tax year 2007–08 and the possible reasons why such an enquiry would be made. (3 marks)
(15 marks) 4 (a) Due date Tax year Payment £
31 July 2007 2006–07 Second payment on account 2,240
31 January 2008 2006–07 Balancing payment 5,980
31 January 2008 2007–08 First payment on account 1,860
31 July 2008 2007–08 Second payment on account 1,860
31 January 2009 2007–08 Balancing payment Nil
31 January 2009 2008–09 First payment on account 1,860
(1) The second payment on account for 2006–07 is based on Pi’s income tax and Class 4 NIC liability for 2005–06. It is
therefore £2,240 (3,240 + 1,240 = 4,480 x 50%).
(2) The balancing payment for 2006–07 is £5,980 (4,100 + 1,480 + 4,880 = 10,460 less the payments on account
of 4,480 (2,240 x 2)). 8J–UKAC
Paper F6UK
8J–UKAD
Paper F6UK
(3) Pi will make a claim to reduce her total payments on account for 2007–08 to £3,720 (2,730 + 990), so each payment
will be £1,860 (3,720 x 50%).
(4) The balancing payment for 2007–08 is £Nil (3,720 less the payments on account of 3,720 (1,860 x 2)).
(5) The first payment on account for 2008–09 is based on Pi’s income tax and Class 4 NIC liability for 2007–08. It is
therefore £1,860 (2,730 + 990 = 3,720 x 50%).
(b) (1) If Pi’s payments on account for 2007–08 were reduced to nil, then she would be charged interest on the payments due
of £1,860 from the relevant due date to the date of payment.
(2) A penalty of up to £3,720 will be charged if the claim to reduce the payments on account to nil was made fraudulently
or negligently.
(c) (1) Unless the return is issued late, the latest date that Pi can submit a paper based self-assessment tax return for 2007–08
is 31 October 2008.
(2) If Pi completes a paper based tax return by 31 October 2008 then HMRC will prepare a self-assessment tax computation
on her behalf.
(3) Alternatively, Pi has until 31 January 2009 to file her self-assessment tax return for 2007–08 online. A self-assessment
tax computation is then automatically provided as part of the filing process.
(d) (1) If HMRC intend to enquire into Pi’s 2007–08 tax return they will have to notify her within twelve months of the date
that they receive the return.
(2) HMRC have the right to enquire into the completeness and accuracy of any return and such an enquiry may be made
on a completely random basis.
(3) However, enquiries are generally made because of a suspicion that income has been undeclared or because deductions
have been incorrectly claimed. | 
发表于 2008-10-11 14:41
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