01 July 2009

Finance Bill 2009

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. Mr Toseland has the following income for the year ended 5 April 2011: Income from employment - £160,000; Bank interest (net - 20% tax deducted at source) - £8,000; Dividends (net or 10% tax credit) - £9,000. What will his personal tax liability be under Self Assessment for the year ended 5 April 2011. [Assumptions - Personal allowance for 2010/11 is £6,475; Basic rate band threshold is £37,400]?

  2. What is the effective rate of tax between £100,000 and £112,950?

  3. Mr Walker has the following income for the year ended 5 April 2011: Income from self-employment - £110,000. What will his personal tax liability be under Self Assessment for the year ended 5 April 2011. [Assumptions – Personal allowance for 2010/11 is £6,475; Basic rate band threshold is £37,400]?

  4. Mr Rossi has earnings of £250,000 in 2008/09. He made pension contributions of £1,000 per month throughout 2008/09. In 2009/10, his earnings were £100,000. In May 2009, he makes an additional pension contribution of £10,000, over and above his regular contributions of £1,000 per month. How much will Mr Rossi's tax liability be on his on 2009/10 pension contributions under the special annual allowance charge?

  5. Mr Hayden makes the following pension contributions during the year ended 5 April 2010: an irregular one-off contribution of £50,000 on 10 April 2009; an irregular one-off contribution of £3,000 on 10 August 2009. How much of Mr Hayden's pension contributions will be subject to the Special Annual Allowance charge for 2009/10?

  6. Stoner Ltd incurs the following expenditure on fixed assets during the year ended 31 December 2009: 01.06.09 Lift shaft - £10,000; 01.07.09 New item of machinery - £90,000. The new items of machinery are items that would fall into the 20% plant and machinery pool and the lift shaft would fall into the 10% pool. The tax written down value brought forward of the 20% plant and machinery pool as at 1 January 2009 is £40,000. There are no other tax written down values brought forward. What would Stoner Ltd's maximum entitlement to capital allowances be for the year ended 31 December 2009, assuming that first year allowances are claimed where possible and optimum use is made of the annual investment allowance?

  7. Mr Pedrosa is a sole trader whose taxable profits/(losses) are as follows: 2006/07 - £200,000; 2007/08 - £4,000; 2008/09 - (£30,000); 2009/10 - (£70,000). Mr Pedrosa's only other source of income is bank interest of £10,000 per year gross. Mr Pedrosa wishes to carry the maximum permissible amount if losses back to 2006/07 as he was a higher rate taxpayer during that year. What is the maximum amount of losses that may be carried back to 2006/07 from 2008/09 and 2009/10 respectively?

  8. Vermeulen Ltd supplies computer software to insurance companies, preparing its VAT returns on a quarterly basis and does not use the cash accounting or flat-rate schemes. In the quarter ended 31 December 2009, it issues the following VAT invoices for goods supplied to unconnected customers: 01.11.2009 (goods supplied 30.10.2009) - £100,000 net of VAT; 31.12.2009 (goods supplied 28.02.2010) - £200,000 net of VAT. In the quarter ended 31 March 2010, it issues the following VAT invoices for goods supplied: 01.02.2010 (goods supplied 01.04.2010) - £100,000 net of VAT. Assuming that Vermeulen Ltd did not incur any input tax on supplies during either period, what would be the company's VAT liability for the quarters ended 31 December 2009 and 31 March 2010?

  9. Edwards Ltd is a VAT registered trader who issues an invoice for £500,000 on 28 December 2009 to Walker Ltd, for a taxable supply of goods; the supply of which is not completed until 5 February 2010. Walker Ltd is VAT registered and is entitled to reclaim the input VAT on the purchase. What will be the additional VAT charge arising as a result of the change in VAT rate?

  10. From which date will large companies have to appoint a senior accounting officer?

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