Friday Five Focus on Taxation – 21 January – 5 Questions in 5 Minutes
Friday Five Focus on Taxation – 5 Questions in 5 Minutes Every Friday
What’s this all about?
Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Taxation; this is useful as you prepare for the CII’s R03 or AF1 exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.
Questions
IMPORTANT! These questions relate to examinable tax year 2021/22, examinable by the CII until 31 August 2022.
- Alex has recently bought £5,400 worth of shares through an online platform provider. Which of the following is he liable for?
- Stamp duty of £30
- Stamp duty of £27
- Stamp duty reserve tax of £30
- Stamp duty reserve tax of £27
- How does Jane receive basic rate tax relief on her individual personal pension contribution?
- She must claim the tax relief back via self-assessment.
- She receives basic rate tax relief at source.
- She makes a gross payment and tax relief is deducted from her total income.
- She is only entitled to tax relief if payments are made via her employer’s payroll.
- Edward is a company director and is considering the best way of taking remuneration from his company. What might be a disadvantage for him of taking a low salary and high dividends?
- Dividends are not relevant earnings and so could restrict pension contributions.
- Corporation tax would be payable at a higher rate as the salary is not being withdrawn from company profits
- A reduced salary would reduce any State pension entitlement in the future.
- The dividend payment would be subject to a higher rate of National Insurance.
- Stuart owed a balancing tax payment of £10,000 on 31st January 2022. In March 2022, he still had not paid it. What penalty will HMRC usually charge Stuart?
- £250
- £500
- £750
- £1,000
- Sarah is NOT registered for VAT but realises on the 1st May 2021 that sales for May will be in the region of £87,000. Which of the following is true regarding VAT registration? Tick all that apply.
- She must inform HMRC before the 30th May
- Once she has informed HMRC she will be VAT registered from the 1st May
- If she doesn’t notify HMRC she may be charged a penalty
- Once she has informed HMRC she will be VAT registered from the 1st June.
Answers
- D – See R03 Study Text, Chp 7
Grab our taster mock exam paper for CII R03. Click here to download.
- B – See R03 Study Text, Chp 1
Grab our taster mock exam paper for CII R03. Click here to download.
- A – See R03 Study Text, Chp 11
Grab our taster mock exam paper for CII R03. Click here to download.
- B – See R03 Study Text, Chp 6
Grab our taster mock exam paper for CII R03 Click here to download.
- ABC – See R03 Study Text, Chp 8
Grab our taster mock exam paper for CII R03. Click here to download.
How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?
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