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Before taking on a new client a ACCA member must assess: 3 začať sa učiť
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assess risk to the integrity of the practice on accepting work. | Risk of money laundering. | Whether the firm has adequate skills and competence. ILS
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Information to be obtained before accepting new COMPANY client by ACCA member: 3 začať sa učiť
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PROOF OF INCORPORATION, primary business address and registered office. | STRUCTURE, directors and shareholders of the company. | IDENTITIES of persons instructing the firm on behalf of the company and persons authorised to do so. PSI
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Information to be obtained before accepting new INDIVIDUAL client by ACCA member: # začať sa učiť
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DETAILS OF NATURE AND STRUCTURE of any unincorporated business interests. | Residential address. | IDs | PERSONS AUTHORISED to act on behalf of the business (for example partners in a partnership). DRIP
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On accepting new work, ACCA member must ask for... 3cz začať sa učiť
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for permission from the client to contact old advisers to request information. | If client refuses, should consider not acting for them. | If not, issue a LETTER OF ENGAGEMENT setting out terms and conditions.
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ACCA member and examples of conflict of interest: DATE začať sa učiť
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Acting for both parties in in a DIVORCE. | Where ADVISER MAY BENEFIT from the transaction. | Asked to act for another party in a TRANSACTION with an existing client. | Acting for the EMPLOYER ant their Employees. | DATE
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ACCA member may act for both parties if safeguards put in place: # začať sa učiť
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Consent should be obtained to act for them. | Accurate firm CONFIDENTIALITY guidelines. | Reveal the potential conflict to all relevant parties.| Teams different for each client. CART Alternatively, consider for just one party, or not acting for either party.
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Fundamental ethical principles: # začať sa učiť
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Professional behaviour. | Integrity. | Competence and due care. | Confidentiality. | Objectivity. PICCO Professional behaviour - Members should comply with relevant laws and regulations and avoid any action that discredits the profession.
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Threats that a professional accountant: # začať sa učiť
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Intimidation. | Familiarity. | Advocacy. | Self-reviewing. | Self-interest. IFA SS
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Consequences of unethical behaviour: PCCDD začať sa učiť
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Professional reputation loss. | Criminal conviction. | Court order (compensation). | Director disqualification order. | Disciplinary action by professional body (including expulsion). PCC_DD
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If accountant becomes aware of a client's tax irregularity, he must... 2cz začať sa učiť
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discuss it with client | and ensure proper disclosure to HMRC. Information provided to HMRC must be accurate and complete. Accountant must not assist a client to plan an offence.
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Accountant's conduct if client made a tax error: GEP začať sa učiť
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Decide if genuine or deliberate act. | Explain to client the need to notify HMRC. | Prompt disclosure taken into account when deciding penalties. GEP A prompted disclosure is a disclosure made after you have received notice of a HMRC audit until the date audit starts.
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Accountant's conduct if client made a tax error and refuses to disclose it: WCH začať sa učiť
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Must explain potential consequences in writing. | If material, consider whether to continue to act for client. | If he still refuses: should cease to act and write to HMRC stating that the firm no longer act for the client but not stating reason why. WCH
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All businesses within regulated sectors must appoint a Money Laundering Reporting Officer within the firm. MLRO decides... 2cz začať sa učiť
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Decides whether to report a transaction to National Crime Agency (NCA).| If a report is made, client should not be informed as this is an offence ('tipping off').
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If a member is an employee and becomes aware of irregularities, first of all he should: 2 začať sa učiť
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Raise a concerns with an appropriate person.| If appropriate action not taken, seek advice from ACCA
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If a member is an employee and becomes aware of irregularities, second of all he should consider: LEP začať sa učiť
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Need to report to Money Laundering Reporting Officer (MLRO). | Resigning from employment. | Need to disclose under Public Interest Disclosure Act. PIDA
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Tax evasion consequences for client and advisor: 2 začať sa učiť
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Client is subject to criminal prosecution. | Adviser is subject to sanctions of criminal law. Examples: supressing information or submitting false information.
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Tax avoidance characteristics: 2 začať sa učiť
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Use of the taxation system to legitimately reduce tax. | Also used to describe tax schemes devised to utilise loopholes in the tax legislation. Tax mitigation - conduct in accordance with the intention of government. | Government introduced specific anti-avoidance schemes.
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To counteract tax avoidance HMRC introduced: 2 začať sa učiť
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Disclosure obligations regarding specific tax avoidance scheme.| General anti-abuse rule (GAAR) to counter artificial, abusive schemes to avoid tax. The regulation allows tax officials to deny tax benefits, if a deal is found without any commercial purpose other than tax avoidance. It also allows officials to deny double taxation avoidance benefits, if deals made in tax havens.
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Serial tax avoidance. Those who persistently engage in tax avoidance schemes defeated by HMRC are subject to... 2cz začať sa učiť
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to a regime of increasing penalties | and may have their details published by HMRC.
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Serious tax offender criteria: 2cz začať sa učiť
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Those who incur a penalty | for deliberate evasion in respect of tax of £5,000.
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Monitoring of serious tax offenders. They will be required to: 3cz Those who incur a penalty for deliberate evasion in respect of tax of £5,000. začať sa učiť
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To submit returns for up to the following 5 years. | Showing more detailed business accounts information | and detailing the nature and value of any BALANCING ADJUSTMENTS within the accounts.
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Dishonest conduct of tax agents - amount of maximum penalty and other consequences: 3 začať sa učiť
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HMRC may publish details of the penalised tax agent | and access the working papers of a dishonest agent with agreement of the Tax tribunal. | Offender incurs a civil penalty up to £50,000.
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Tax offenders. HMRC have the power to The names and details of... who... 2cz začať sa učiť
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of individuals and companies | who are penalised for deliberate defaults leading to a tax loss of more than £25,000.
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Tax offenders. HMRC will NOT publish those who... 2 začať sa učiť
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make a full unprompted disclosure | or a full promped disclosure within the required time.
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Consideration for accountants when giving advice to clients: u n i m o r t a n t začať sa učiť
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Know the Professional Code of Ethics. | Know your client - fact find. | Best advice - must be suitable. | Best execution - obtain best price. | Avoid unnecessary transactions. | Explain why given course of action is recommended.
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Giving advice to clients - factors relating to client to consider: ROLADCE začať sa učiť
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Risk acceptable. | Objectives of client. | Liquidity. | Age. | Dependants. | Current position. | Efficiency of tax. ROLADCE
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Personal financial management. Individuals must balance the need for income on an on-going basis with investing for capital growth to be used to fund retirement. Factors consider when making investment. 3 Suitable investments will change during an individual's lifetime as lifestyle and income streams change. začať sa učiť
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Risk attitude.| Need to ensure some investments are readily realisable to fund immediate unforeseen demands.| Likelihood of receiving an inheritance. also: Income available after meeting current obligations.| Desire to own home and method of financing.| Need to fund children's education.| Responsibility to support parents.| Required lifestyle on retirement.| Desire to leave an inheritance to children.
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Examples of highly liquid investments products: 3 začať sa učiť
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Premium bonds. | Individual saving accounts. | Gilts. PIG
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Examples low-risk investment products: 3 začať sa učiť
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Gilts. | VCT scheme. | Building society accounts. GVB
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Examples of very high-risk investment products: 2 začať sa učiť
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Cryptocurrencies. | Unquoted shares.
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Examples of income tax-free and CGT-free investment products: začať sa učiť
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Pension schemes. | ISAa. | NSI saving certificates
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Examples of INCOME growth investment products: 2 začať sa učiť
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Gilts. | NSI saving certificates. GN Capital growth: Pension schemes. | Quoted shares. | VCT schemes.
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VCT - Qualifying individuals: začať sa učiť
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Subscribers (newly issues shares). EIS, SEIS, VCT - Special tax relief to encourage investment by individuals in riskier small companies.
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EIS, SEIS - Qualifying individual shareholding limit: začať sa učiť
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no more than 30% of ordinary share capital in qualifying company. New ordinary shares. Subscribers in cash. | No limit for VCT.
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EIS - Qualifying individual subscriber requirements: 2cz začať sa učiť
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Not employee or director. | Independent of company prior to first issue.
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SEIS - Qualifying individual subscriber requirements: ? začať sa učiť
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Not current employee | (can be director | or previous employee).
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EIS, SEIS, VCT - Maximum investment limits: 3 [absolute figures] začať sa učiť
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1 milion per annum. | £100,000 per annum. | £200,000 per annum.
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EIS, SEIS - retention period for I.T. relief: začať sa učiť
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3 years (I.T. relief withdrawn if sold within 3 years).
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VCT - retention period for I.T. relief: začať sa učiť
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5 years (I.T. relief withdrawn if sold within 5 years).
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začať sa učiť
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Relief deducted from IT liability.
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začať sa učiť
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Relief deducted from IT liability.
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začať sa učiť
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30% of amount subscribed. Relief deducted from IT liability.
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EIS, SEIS, VCT - Carryback amount to previous year: 3 začať sa učiť
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Any amount invested, but cannot get relief on more than 1 milion in any one tax year. | Any amount invested, but cannot get relief on more than £100,000 in any one tax year. | No carryback.
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EIS, SEIS - Capital gain tax operating: 2cz začať sa učiť
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Gain exempt if shareholding held more than 3 years. | Loss is allowable (can be converted into IT loss). Also: SEIS rollover relief available for the lower of 50% of amount invested and 50% of CGT liability resulting from other disposals.
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VCT - Capital gain tax operating: začať sa učiť
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No gain or loss whenever sold.
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EIS - reinvestment relief crystallises when: 2 začať sa učiť
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when EIS shares disposed of | or investor/spouse emigrates (become non-resident) within 3 years.
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SEIS - reinvestment relief rate of exemption: začať sa učiť
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After 3 years of holding up to 50% of gain on any chargeable asset can be exempt.
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EIS, SEIS, VCT - Dividend taxation: 3 začať sa učiť
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taxable | taxable | tax-free on investment within annual limit of £200,000...
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IHT-BPR availability for EIS, SEIS and VCT. 3 začať sa učiť
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100% if owned at least 2 years. | 100% if owned at least 2 years. | No BPR.
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Personal sources of finance: MUCHOS začať sa učiť
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Mortgage. | Unsecured loan.* | Credit cards (the most expensive). | Hire purchase.* | Overdraft. | Secured loan.
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Business sources of finance: SLE začať sa učiť
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Short-term debt | Long-tern debt | Equity E.g. overdraft, trade credit, debt factoring. | For purchase of asses, provision of working capital. | Doesn't need to be repaid. Dividends can vary each year, not tax deductible. Outside influence. | Interest payments fixed, but tax deductible.
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Income tax return due dates: 3 začať sa učiť
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3 months after issue of the notice to file a return. | 31 October (paper return).| 31 January (electronic return). 3 months | 6 months | 9 months
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Notification of gain chargeability to HMRC due date: začať sa učiť
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Within 6 months of the END OF TAX YEAR in which the liability arises - 5 October. Standard penalty may apply for failure to notify of chargeability.
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Income tax amendments due dates: 2 začať sa učiť
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HMRC can amend return within 9 months of the actual filing date. | Taxpayer can amend it within 12 months of the 31 January filing date.
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Determination of tax due if no return is filed can be issued by HMRC at any time within... Where a self-assessment tax return is not filed by the filing date, HMRC may determine the amount of tax due. začať sa učiť
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3 years of the filing date. i.e. by 31 January 2025 for the tax year 2020/21
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Characteristics of Determination of tax by HMRC. 3 začať sa učiť
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The determination is treated as a self-assessment by the taxpayer. | Determination can only be replaced by the actual self- assessment when it is submitted by the taxpayer. | There is no appeal against a determination.
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A business must keep records of: 3 začať sa učiť
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All receipts and expenses. | All goods purchased and sold. | All supporting documents relating to the transaction of the business such as accounts, books, contracts, vouchers.
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How long the self-employed taxpayers must retain all their records (not just business records)? začať sa učiť
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5 years after the 31 January filing date. For 2020/21 - until 31 January 2027.
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How long the Individual taxpayers must normally retain the evidence of income received? začať sa učiť
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12 months after the 31 January filing date. For 2020/21 - until 31 January 2023. A fixed penalty of up to £3,000 may be charged for failure to keep or retain adequate records.
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Self-assestment - IT payments dates for 2020/21: ? začať sa učiť
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31 January 2021. | 31 July 2021. | 31 January 2022. POA | POA | balancing payment POA = half previous years' tax payable by self-assessment and class 4 NIC (relevant amount).
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Calculation of POA for income tax: začať sa učiť
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Half previous years' tax payable by self-assessment and class 4 NIC Late payment interest is charged on all late payments of tax, at a daily rate. It runs from due date to date of payment. | HMRC pay interest on overpaid tax from later of - date tax due - or date HMRC received tax.
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Taxpayer do not pay POAs if: 2 *i.e. income tax and class 4 NIC začať sa učiť
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If relevant amount for previous year does not exceed £1,000 | or more than 80% of the assessed tax* of the previous year was collected at source. *i.e. income tax and class 4 NIC
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Standard penalties applies in two circumstances: 2 I.T., CGT, VAT, NIC, C.T. začať sa učiť
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Submission of incorrect returns (all taxes). | Failure to notify liability to tax (I.T., CGT, VAT, NIC, C.T.). Penalty = % of potential lost revenue [table given]. Percentage depends on the behaviour of the taxpayer. | Minimum penalties based on taxpayer behaviour and whether disclosure is prompted or unprompted. Taxpayer can appeal against a standard penalty.
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Penalties for late filing or self-assessment tax return by an individual up to 12 months: ? začať sa učiť
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£100. | Additional daily penalties of £10 per day (maximum 90 days). | Additional 5% of tax due (minimum £300). 0 - 3 | 3 - 6 | 6-12 months.
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Additional penalties for late filling or self-assessment tax return by an individual over 1 year: ? začať sa učiť
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Additional 5% of tax due (minimum £300). | 70% of tax due (minimum £300). | 100% of tax due (minimum £300). Where withholding information was: not deliberate | deliberate but no concealment | deliberate with concealment
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Late payment of tax penalties up to year for self-employed in relation to Balancing Payment: ? začať sa učiť
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5% of tax due | additional 5% | additional 5%. >1 month | >6 months | >12 months
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Penalty for fraud or negligence on claiming reduced POAs formula: začať sa učiť
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POAs if claim not made − POAs actually paid Note: 'tax' for individual will include income tax, CGT and NIC.
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HMRC can raise a Discovery Assessment if they discover an inaccuracy in the return within: 3 začať sa učiť
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Basically: 4 years. | Careless error: 6 years. | Deliberate error: 20 years. Time from the end of tax year:
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HMRC requires to third parties for information about taxpayer must normally: 2 začať sa učiť
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be agreed by the taxpayer | or approved by the first-tier tribunal. Tax Tribunal system comprises a First-tier Tribunal and Upper Tribunal.
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New inspection power of HMRC: 3cz začať sa učiť
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Enter and inspect a taxpayer's business premises | in order to inspect business records | and assets.
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Taxpayer can appeal against a decision made by HMRC within... začať sa učiť
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within 30 days of the disputed decision. It must be in writing.
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When making an appeal against HMRC decision, taxpayer can proceeds in one of two ways: 2 začať sa učiť
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Request a review by another HMRC officer. | Or refer case to an independent Tax Tribunal.
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The First-tier Tribunal deals with: 4 začať sa učiť
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Default paper cases. | Basic cases. | Standard cases.| Complex cases.* *may by heard by First-Tier; however usually heard by Upper Tribunal Simple appeals (like against a fixed penalty). Usually no hearing provided both sides agree.| Straightforward appeals. Minimal exchange of paperwork. A short hearing.| More detailed consideration of issues. More formal hearing.
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Upper Tribunal deal with complex cases requiring: 2 začať sa učiť
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Specialist knowledge. | A formal hearing. Hearings are held in public and decisions are publish.
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Appeal against a decision of the Upper Tribunal: 2cz začať sa učiť
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to the Court of Appeal | but only on grounds of a point of law.
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Which tax is payable in respect of favourable exercise disadvantaged share option plan? začať sa učiť
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based on difference between price paid and MV. The GCT is payable on subsequent sale of shares, not for exercise option itself.
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What is crucial factor when deciding whether buy and later sold shares by individual personally or by his parent company: začať sa učiť
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SSE availability vs BADR availability Also the fact that individual cannot realise a gain on sale directly from the parent company, but by dividends or bonus, which is expensive.
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Does dividend nil rate band reduce basic and higher rate bands? začať sa učiť
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Only when determining the rate of tax on the remaining dividend income.
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Change of accounting date. Business has 16 months period of account with £94,000 profit and overlap for 5-month period of £15,000. Calculate taxable trading profit of the year with a accounting date changed. začať sa učiť
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Change of accounting date. Business has year end on 31 October 2020 and change it to 31 April. Profit for the year is £54,000. Stipulate timespan of new AP and change in overlap profits. 2 začať sa učiť
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30 April 2020 - 30 April 2021 | Overlap profits increased by £27,000 (6 months). That's because new date is earlier in the tax year than old one, the basis period for the year of change will be 12 months ending to the new accounting date. This will create additional overlap profits.
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