ACA Tax Compliance

Question 1

For the 2025/26 UK tax year, what is the personal allowance for an individual with total income below £100,000?

Accepted Answer

£12,570

Answer

The personal allowance for 2025/26 remains at £12,570. This is the amount of income an individual can earn before paying income tax. The allowance is reduced by £1 for every £2 of income above £100,000, meaning it is fully eliminated at £125,140.

Question 2

A UK sole trader has adjusted trading profits of £60,000 for the tax year 2025/26. How much Class 4 National Insurance is payable (assuming standard rates of 6% on profits between £12,570 and £50,270, and 2% above £50,270)?

Accepted Answer

£2,456.60

Answer

Class 4 NIC: On profits £12,570 to £50,270 = £37,700 × 6% = £2,262. On profits £50,270 to £60,000 = £9,730 × 2% = £194.60. Total = £2,262 + £194.60 = £2,456.60.

Question 3

Under UK tax law, which of the following is an exempt supply for VAT purposes?

Accepted Answer

Supply of insurance services

Answer

Insurance services are exempt from VAT under Schedule 9 of the VAT Act 1994. This means no VAT is charged on insurance premiums, but the insurer cannot reclaim input VAT on related costs. Children's clothing is zero-rated (not exempt), restaurant food is standard-rated, and new dwelling construction is zero-rated.

Question 4

A UK company has taxable profits of £300,000 for its accounting period ending 31 March 2026. At the main rate of corporation tax of 25%, what is the corporation tax liability?

Accepted Answer

£75,000

Answer

For profits above £250,000 the main rate of corporation tax of 25% applies with no marginal relief. Corporation tax = £300,000 × 25% = £75,000. Companies with profits between £50,000 and £250,000 benefit from marginal relief.

Question 5

By what date must a self-assessment tax return for the 2025/26 tax year be filed online to avoid an automatic late filing penalty?

Accepted Answer

31 January 2027

Answer

Online self-assessment tax returns for the 2025/26 tax year (ending 5 April 2026) must be filed by 31 January 2027. Paper returns have an earlier deadline of 31 October 2026. A £100 penalty applies automatically for late filing even if no tax is due.

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ACA Tax Compliance