ACA Tax Compliance (UK) 3

Question 1

The UK corporation tax payment deadline for a large company (paying by instalments) is based on:

Accepted Answer

Quarterly instalments during and after the accounting period

Answer

Large companies pay corporation tax in four quarterly instalments: two during the accounting period and two after. Very large companies pay even earlier instalments.

Question 2

Which relief allows trading losses to be set against total income of the current or preceding accounting period for UK corporation tax?

Accepted Answer

Current year and carry-back relief

Answer

Under CTA 2010, a company can claim relief for a trading loss against total profits of the current period and, if not fully relieved, carry back to the previous 12 months. Extended carry-back was available for COVID years.

Question 3

Entrepreneurs' Relief (now Business Asset Disposal Relief) reduces the CGT rate to:

Accepted Answer

10%

Answer

Business Asset Disposal Relief (BADR) applies a 10% CGT rate on qualifying gains from disposal of a business or business assets, subject to a lifetime limit (£1 million).

Question 4

For UK employment income purposes, the employer's Class 1 National Insurance rate above the secondary threshold is:

Accepted Answer

15%

Answer

From April 2025, the employer's Class 1 NIC rate increased to 15% on earnings above the secondary threshold (£5,000 per year from April 2025), announced in the October 2024 Budget.

Question 5

For UK self-employed individuals, Class 4 NIC is charged on profits between the lower profits limit and upper profits limit at:

Accepted Answer

8%

Answer

Class 4 NICs are charged at 6% on profits between £12,570 and £50,270 following the reduction from 9% in 2024. Above £50,270, Class 4 NICs are charged at 2%.

ACA ICAEW Practice Test

ACA ICAEW Practice Test

ACA Tax Compliance (UK) 3