AAT L4 Business Tax

Question 1

For Corporation Tax purposes, a UK limited company's accounting period can be a maximum of:

Accepted Answer

12 months

Answer

6 months

Answer

18 months

Answer

24 months

Question 2

Which of the following is an allowable deduction when calculating tax-adjusted trading profits for Corporation Tax?

Accepted Answer

Staff salary costs and employer's National Insurance contributions

Answer

Entertaining UK customers

Answer

Depreciation of plant and machinery

Answer

Political donations

Question 3

A company purchases a machine for £120,000. It qualifies for the Annual Investment Allowance. If the AIA limit is £1,000,000, what capital allowance can be claimed?

Accepted Answer

£120,000

Answer

£18,000

Answer

£1,000,000

Answer

£24,000

Question 4

A company has a trading loss of £80,000 in the year ended 31 March 2026. Which loss relief options are available?

Accepted Answer

Set against total profits of the current period, carry back against total profits of the previous 12 months, or carry forward against future trading profits

Answer

Carry forward against future total profits only

Answer

Carry back up to 5 years

Answer

Claim a VAT repayment equal to the loss

Question 5

For capital gains purposes, indexation allowance for companies:

Accepted Answer

Reduces the gain by adjusting the cost for inflation up to December 2017

Answer

Increases the gain by adjusting for inflation

Answer

Is available to both companies and individuals

Answer

Has no frozen date

Question 6

Which of the following is exempt from Corporation Tax on chargeable gains?

Accepted Answer

Sale of shares qualifying for Substantial Shareholding Exemption

Answer

Sale of an investment property

Answer

Sale of goodwill

Answer

Disposal of a motor vehicle used in the trade