Principles of TAX ICAEW REAL EXAM
QUESTIONS AND CORRECT ANSWERS (VERIFIED
ANSWERS)|AGRADE
What does the property value have to be above where there is additional rent? - Answer
-£75,000
How many years does the property have to be owned by the employer before given to
the employee, for it to be valued at Market Value & not the orginal cost? - Answer -
MORE THAN 6 years
What % does the use of assets have to be used for private use to be deemed as
insignificant ? - Answer -40%
For Car benefit, what is the maximum contribution the employee can contribute? -
Answer -£5000
Can you deduct the employee contributions to fuel for cars? - Answer -No
What cost does in-house benefit use? - Answer -Marginal - the additional cost, NOT the
normal fee or average.
What is the maximum % a Car benefit can go up to? - Answer -37%
Is employment income on an accruals or receipts basis ? - Answer -receipts - when you
are paid or entitiled to
When is Living accomodation EXEMPT from being a chargeable benefit? - Answer -
Job-related - proper/better performance or is provided if there is a security threat
Can directors claim the exemptions of Living accomodation? - Answer -Yes - If he is
working full time, owns less than 5% shares or works for a non-profit charity.
When does the employee have to pay back the benefit by for the benefit to be zero ? -
Answer -6th of July, the following Tax year
Is L&H a chargeable benefit or Exempt benefit regarding accommodation expenses? -
Answer -Chargeable.
RITZ LTD decorated the flat which the employer owns, but is currently being resided by
an employee called Bob, does Bob have to pay for this decoration accomodation
expense? - Answer -Yes
For a VAN is driving from work to home considered private use? - Answer -No
,How do you calculate Assets for private use? - Answer -20% the Market Value (If its
41%+ for Private use)
Is a pool car a taxable benefit? - Answer -No, it is exempt.
When must you pay your PAYE by ? - Answer -2 weeks after the end of the tax month
(5th) so the 19TH of each month.
How many employee's must you have where you have to submit your PAYE payments
electronically? - Answer -If you have 250+ employees
Are PAYE payment deadlines extended if you pay electronically? - Answer -Yes, they
are extended to the 22nd (By 3 days)
When are you able to pay your PAYE quarterly? - Answer -If your NI & PAYE is less
than £1500 a month
Is it a Criminal offence to not comply with HMRC wanting security where payments are
at risk? - Answer -Yes & up to a £5000 fine.
What is Real time information ? - Answer -Emloyers are made to provide HMRC with
information everytime a payment is made to an employee, this ensures the right amount
of tax is being paid over.
What is the tax code 'L' & does it come before or after the number? - Answer -Basic
Personal allowance, and it goes after.
What is the tax code 'N' & does it come before or after the number? - Answer -LESS
Marriage allowance £1250 & it goes after
What is the tax code 'M' & does it come before or after the number? - Answer -PLUS
Marriage Allowance £1250 & is after
What is the tax code 'M' & does it come before or after the number? - Answer -It is when
you have used up all your personal allowance, either by earning £125K or having
benefits over £12,500. It goes BEFORE the number.
How do you calculate the number to go in the Tax Codes - Answer -(PA + Allowable
exp+ overpaid tax) - (Taxable benefits + Underpaid Tax) = Number
- You must remove the last digit of the number
- for the 'K' code ONLY, you muse '-1' from the number.
When you +/- the overpaid/underpaid tax when calculating the Tax code numbers, do
you use the Tax amount, or the Gross amount? - Answer -You Gross it up depending
on the tax band they are in, basic/higher etc.
, Exempt benefit or chargeable: Contributions by an employer to a registered pension
scheme? - Answer -Exempt
Exempt benefit or chargeable: A cash voucher of £50 given to an employee for their
birthday - Answer -Chargeable as it is CASH, must be non-cash
Exempt benefit or chargeable: Non-cash present of £40 for Sarahs birthday - Answer -
Exempt
Exempt benefit or chargeable: £35 plant given to Sarah for her hard work the past
month. - Answer -Chargeable - the present must be for Non-work reasons , such as a
birthdya, even if it is not cash & Under £50 .
Exempt benefit or chargeable: Pension advice for £600 tax year - Answer -Chargeable -
It is up to £500
Exempt benefit or chargeable: Tax planning for ALL employees for £500. - Answer -
Exempt
Exempt benefit or chargeable: Tax planning given only to Jill & Bob the seniors worth
£450 - Answer -Chargeable - Must be Available to ALL employees.
Exempt benefit or chargeable: Birthday watch given to a Director for £250 (Only present
given this year) - Answer -Exempt - up to £300 for certain directors annually.
Exempt benefit or chargeable: Childcare facilities ran by the employer - Answer -
Exempt
Exempt benefit or chargeable: Childcare payments by employers for £55 starting from
April 2019. - Answer -Chargeable : This scheme stopped on the 4th October 2018.
Exempt benefit or chargeable: in 2014, childcare payments of £55 per week, £28 for
HR, & £25 for AR, provided by the employer. - Answer -Exempt
Exempt benefit or chargeable: June is given £65 a week for her childcare, she is basic
rate. (2016) - Answer -Chargeable - £55 cap for basic rate.
Exempt benefit or chargeable: Steven given £28 per week childcare payments - he is an
additional rate tax payer. (2016) - Answer -Chargeable - Only allowed payments of £25
per week when you are an additional tax payer.
Exempt benefit or chargeable: Karl is given a mobile phone, including calls. - Answer -
Exempt
QUESTIONS AND CORRECT ANSWERS (VERIFIED
ANSWERS)|AGRADE
What does the property value have to be above where there is additional rent? - Answer
-£75,000
How many years does the property have to be owned by the employer before given to
the employee, for it to be valued at Market Value & not the orginal cost? - Answer -
MORE THAN 6 years
What % does the use of assets have to be used for private use to be deemed as
insignificant ? - Answer -40%
For Car benefit, what is the maximum contribution the employee can contribute? -
Answer -£5000
Can you deduct the employee contributions to fuel for cars? - Answer -No
What cost does in-house benefit use? - Answer -Marginal - the additional cost, NOT the
normal fee or average.
What is the maximum % a Car benefit can go up to? - Answer -37%
Is employment income on an accruals or receipts basis ? - Answer -receipts - when you
are paid or entitiled to
When is Living accomodation EXEMPT from being a chargeable benefit? - Answer -
Job-related - proper/better performance or is provided if there is a security threat
Can directors claim the exemptions of Living accomodation? - Answer -Yes - If he is
working full time, owns less than 5% shares or works for a non-profit charity.
When does the employee have to pay back the benefit by for the benefit to be zero ? -
Answer -6th of July, the following Tax year
Is L&H a chargeable benefit or Exempt benefit regarding accommodation expenses? -
Answer -Chargeable.
RITZ LTD decorated the flat which the employer owns, but is currently being resided by
an employee called Bob, does Bob have to pay for this decoration accomodation
expense? - Answer -Yes
For a VAN is driving from work to home considered private use? - Answer -No
,How do you calculate Assets for private use? - Answer -20% the Market Value (If its
41%+ for Private use)
Is a pool car a taxable benefit? - Answer -No, it is exempt.
When must you pay your PAYE by ? - Answer -2 weeks after the end of the tax month
(5th) so the 19TH of each month.
How many employee's must you have where you have to submit your PAYE payments
electronically? - Answer -If you have 250+ employees
Are PAYE payment deadlines extended if you pay electronically? - Answer -Yes, they
are extended to the 22nd (By 3 days)
When are you able to pay your PAYE quarterly? - Answer -If your NI & PAYE is less
than £1500 a month
Is it a Criminal offence to not comply with HMRC wanting security where payments are
at risk? - Answer -Yes & up to a £5000 fine.
What is Real time information ? - Answer -Emloyers are made to provide HMRC with
information everytime a payment is made to an employee, this ensures the right amount
of tax is being paid over.
What is the tax code 'L' & does it come before or after the number? - Answer -Basic
Personal allowance, and it goes after.
What is the tax code 'N' & does it come before or after the number? - Answer -LESS
Marriage allowance £1250 & it goes after
What is the tax code 'M' & does it come before or after the number? - Answer -PLUS
Marriage Allowance £1250 & is after
What is the tax code 'M' & does it come before or after the number? - Answer -It is when
you have used up all your personal allowance, either by earning £125K or having
benefits over £12,500. It goes BEFORE the number.
How do you calculate the number to go in the Tax Codes - Answer -(PA + Allowable
exp+ overpaid tax) - (Taxable benefits + Underpaid Tax) = Number
- You must remove the last digit of the number
- for the 'K' code ONLY, you muse '-1' from the number.
When you +/- the overpaid/underpaid tax when calculating the Tax code numbers, do
you use the Tax amount, or the Gross amount? - Answer -You Gross it up depending
on the tax band they are in, basic/higher etc.
, Exempt benefit or chargeable: Contributions by an employer to a registered pension
scheme? - Answer -Exempt
Exempt benefit or chargeable: A cash voucher of £50 given to an employee for their
birthday - Answer -Chargeable as it is CASH, must be non-cash
Exempt benefit or chargeable: Non-cash present of £40 for Sarahs birthday - Answer -
Exempt
Exempt benefit or chargeable: £35 plant given to Sarah for her hard work the past
month. - Answer -Chargeable - the present must be for Non-work reasons , such as a
birthdya, even if it is not cash & Under £50 .
Exempt benefit or chargeable: Pension advice for £600 tax year - Answer -Chargeable -
It is up to £500
Exempt benefit or chargeable: Tax planning for ALL employees for £500. - Answer -
Exempt
Exempt benefit or chargeable: Tax planning given only to Jill & Bob the seniors worth
£450 - Answer -Chargeable - Must be Available to ALL employees.
Exempt benefit or chargeable: Birthday watch given to a Director for £250 (Only present
given this year) - Answer -Exempt - up to £300 for certain directors annually.
Exempt benefit or chargeable: Childcare facilities ran by the employer - Answer -
Exempt
Exempt benefit or chargeable: Childcare payments by employers for £55 starting from
April 2019. - Answer -Chargeable : This scheme stopped on the 4th October 2018.
Exempt benefit or chargeable: in 2014, childcare payments of £55 per week, £28 for
HR, & £25 for AR, provided by the employer. - Answer -Exempt
Exempt benefit or chargeable: June is given £65 a week for her childcare, she is basic
rate. (2016) - Answer -Chargeable - £55 cap for basic rate.
Exempt benefit or chargeable: Steven given £28 per week childcare payments - he is an
additional rate tax payer. (2016) - Answer -Chargeable - Only allowed payments of £25
per week when you are an additional tax payer.
Exempt benefit or chargeable: Karl is given a mobile phone, including calls. - Answer -
Exempt
