©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
SQE 1 – Tax Exam Questions With Verified
Answers
What is income? - Answers✔Money received every month on a recurring basis, or interest paid
on a debenture every year.
What is the difference between capital profits and income? - Answers✔Capital profits are not
recurring as they come from a sale of an asset. Capital profits are subject to Capital Gains Tax
instead.
When does the tax year run? - Answers✔6 April to 5 April
Under the PAYE system, when and what must the employer send to HMRC? - Answers✔On or
before each payday, employers must send a report called a Full Payment Submission
When must payments be submitted by employers to HMRC? - Answers✔Monthly, unless under
£1,500 (which is quarterly)
If the employer is paying electronically, when must the report and payment be received by? -
Answers✔22nd of the month.
When must tax returns be filed if done so electronically? - Answers✔31st January after the tax
year
(E.g. tax year 25/26 would need to be submitted by 31st Jan 2027
When must a tax return be filed if done so on paper? - Answers✔31st October after the tax year
For self-assessing taxpayers, when are payments due? - Answers✔2 payments:
- 31 January in the tax year
- 31 July after the tax year
1
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
(Any balancing payments due 31st after the tax year)
What are the three categories of income? - Answers✔- Non-savings
- Savings
- Dividend
Will a UK resident pay income tax on foreign income? - Answers✔Yes, both UK and foreign
income is taxable.
What types of income are exempt from income tax? - Answers✔- National Savings Certificates
- ISA
- Premium Bonds
- Social security benefits
- Child benefit
Within what timeframe must a soletrader or a partner register with HMRC? - Answers✔3 months
of becoming self-employed.
What is an accounting period? - Answers✔The 12 month period the taxpayer has chosen for
keeping financial records of the business, which may be different to the tax year
How do you calculate trading profit? - Answers✔Gross income - revenue related expenses
(salaries, bills, cost of goods sold etc)
(NOTE: the purchase of one off items are capital expenses and are treated differently with the
AIA)
What is the annual investment allowance (AIA)? - Answers✔AIA allows the taxpayer to deduct
the costs of plant and machinery up to the available AIA for the accounting period.
What assets are not included by the AIA? - Answers✔Land, buildings or cars.
What is a writing down allowance? - Answers✔For the costs of capital assets not included in the
AIA, this enables taxpayer to deduct a fixed percentage of the cost of an asset.
What is the writing down allowance rate? - Answers✔18% for most items, 6% for life-long
assets.
How are partners taxed? - Answers✔On their share of the partnership's annual profits, whether or
not these profits are distributed.
2
ALL RIGHTS RESERVED.
SQE 1 – Tax Exam Questions With Verified
Answers
What is income? - Answers✔Money received every month on a recurring basis, or interest paid
on a debenture every year.
What is the difference between capital profits and income? - Answers✔Capital profits are not
recurring as they come from a sale of an asset. Capital profits are subject to Capital Gains Tax
instead.
When does the tax year run? - Answers✔6 April to 5 April
Under the PAYE system, when and what must the employer send to HMRC? - Answers✔On or
before each payday, employers must send a report called a Full Payment Submission
When must payments be submitted by employers to HMRC? - Answers✔Monthly, unless under
£1,500 (which is quarterly)
If the employer is paying electronically, when must the report and payment be received by? -
Answers✔22nd of the month.
When must tax returns be filed if done so electronically? - Answers✔31st January after the tax
year
(E.g. tax year 25/26 would need to be submitted by 31st Jan 2027
When must a tax return be filed if done so on paper? - Answers✔31st October after the tax year
For self-assessing taxpayers, when are payments due? - Answers✔2 payments:
- 31 January in the tax year
- 31 July after the tax year
1
, ©THEBRIGHT EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
(Any balancing payments due 31st after the tax year)
What are the three categories of income? - Answers✔- Non-savings
- Savings
- Dividend
Will a UK resident pay income tax on foreign income? - Answers✔Yes, both UK and foreign
income is taxable.
What types of income are exempt from income tax? - Answers✔- National Savings Certificates
- ISA
- Premium Bonds
- Social security benefits
- Child benefit
Within what timeframe must a soletrader or a partner register with HMRC? - Answers✔3 months
of becoming self-employed.
What is an accounting period? - Answers✔The 12 month period the taxpayer has chosen for
keeping financial records of the business, which may be different to the tax year
How do you calculate trading profit? - Answers✔Gross income - revenue related expenses
(salaries, bills, cost of goods sold etc)
(NOTE: the purchase of one off items are capital expenses and are treated differently with the
AIA)
What is the annual investment allowance (AIA)? - Answers✔AIA allows the taxpayer to deduct
the costs of plant and machinery up to the available AIA for the accounting period.
What assets are not included by the AIA? - Answers✔Land, buildings or cars.
What is a writing down allowance? - Answers✔For the costs of capital assets not included in the
AIA, this enables taxpayer to deduct a fixed percentage of the cost of an asset.
What is the writing down allowance rate? - Answers✔18% for most items, 6% for life-long
assets.
How are partners taxed? - Answers✔On their share of the partnership's annual profits, whether or
not these profits are distributed.
2
