5 Fundamental Principles? - Answer OPPIC
5 Threats to compliance with fundamental principles? - Answer Self-interest, self-review,
advocacy, familiarity, intimidation
Safeguards to help reduce threats to compliance of principles? - Answer Education/training,
CPD requirements, regulations, standards, procedures, external review, complaints system,
conflict resolution process? - Answer 1) consider facts, ethics and procedures 2)if still
unresolved seek advice from firm 3)if can't seek advice internally, contact ICAEW 4)can't resolve
after that then withdraw
Offences punished by imprisonment - Answer MLO 14yrs, Failure to report 5yrs, Tipping off
2yrs
What defines a company to be a resident in the UK - Answer If it is incorporated in the UK or
is centrally managed and controlled in the UK
What is the purpose of the loan-relationship rule? - Answer Determine whether interest
payable/receivable is classified as trading or non-trading?
What is Qualifying Charitable Donation (QCD)? - Answer Relief received for charitable
donations through deductions when calculating taxable total profits.
Equation for Augmented Profits? - Answer TTP + Exempt ABGH Distributions (dividends from
other companies not including dividends from 51% subsidiaries)
How to calculate the corporation tax liability? - Answer 1) Calc TTP 2) Calc Augmented profits
3) Decide what rate to tax at 4) Tax TTP at this rate
What is a CT600? - Answer Corporation tax return
What is case law? - Answer Decisions made in tax cases brought before the court. They're
binding and provide guidance on the interpretation of tax statutes.
What is the efficiency principle? - Answer Cost of collection of tax < Tax Raised
, What do HMRC do and don't do? - Answer Control and administer most areas of UK tax law
but does NOT MAKE the tax rules
What does the current UK tax system encourage? - Answer Savings habits, charitable
donations, entrepreneurs/investors
What does the UK govt discourage? - Answer Driving petrol/diesel vehicles through fuel
duties, drinking alcohol through tax
What is the neutrality principle? - Answer Taxes should NOT distort choice. However taxes
have been used to influence many economic factors.
Direct/Indirect Taxes? - Answer Direct - Those who generate funds, Indirect - transaction-
based and relate to consumption
Progressive/Regressive Principle? - Answer Progressive Tax increases with income, Regressive
Tax decrease with income
Unit/Value Principle? - Answer Unit taxes calculated at flat rate regardless of value, Value
taxes are a percentage of the value of goods/services
What are external influences? - Answer Global concerns - climate change, effect of oil and
food prices on cost of living
What is income tax? - Answer A tax on people's earnings (self employment or employment)
payable by the individual, collected through PAYE system
National Insurance Contributions - Answer Money deducted from the pay of people who are
employed or self-employed and used by the government to fund state pensions and other
benefits.
Corporation Tax? - Answer Payable by companies on all their income and gains
Capital Gains Tax - Answer Payable by individuals on disposal of capital assets (this could be
any type/size of capital asset), doesn't apply to companies
Financial Year? - Answer 1st April to 31st March