TX: Taxation

• Topic 01

  The UK Tax System and its Administration

  254 questions
• Topic 02

  Income Tax Liabilities

  221 questions
• Topic 03

  Chargeable Gains for Individuals

  256 questions
• Topic 04

  Corporation Tax Liabilities

  265 questions
• Topic 05

  National Insurance Contributions

  239 questions
• Topic 06

  Value Added Tax

  263 questions

A few questions from this unit, with the answer and a full explanation. The complete bank is available when you start practising.

1. How does the notification deadline under the historic test differ from the notification deadline under the future test?

   • A
     Historic test requires immediate notification; future test allows 30 days
   • B
     Both require notification within 30 days of the end of the month
   • C
     Historic test: within 30 days of the end of the month the threshold was exceeded. Future test: before the end of the 30-day period in which turnover is expected to exceed the threshold
     Correct answer
   • D
     There is no difference — both have the same notification rules
   Explanation

   The deadlines differ:

   • Historic test: notify within 30 days of the end of the month in which the 12-month rolling turnover exceeded GBP 90,000
   • Future test: notify before the end of the 30-day period during which turnover is expected to exceed GBP 90,000

   The future test also has a different effective date: registration from the beginning of the 30-day period (not the second month after). The future test is triggered when there are reasonable grounds to believe turnover in the next 30 days alone will exceed GBP 90,000.

2. An individual has no employment or trading income, savings income of GBP 18,000, and dividend income of GBP 5,000. The personal allowance is GBP 12,570. How is the personal allowance allocated and what is the taxable income?

   • A
     GBP 12,570 against dividend income first, leaving taxable savings income of GBP 18,000 and taxable dividend income of nil
   • B
     GBP 7,570 against savings and GBP 5,000 against dividends to minimise total tax
   • C
     The personal allowance cannot be used against savings income — it can only offset non-savings income
   • D
     GBP 12,570 against savings income, leaving taxable savings income of GBP 5,430 and taxable dividend income of GBP 5,000
     Correct answer
   Explanation

   With no non-savings income, the personal allowance moves to the next category in order: savings income.

   PA of GBP 12,570 set against savings income of GBP 18,000 → taxable savings = GBP 5,430

   Dividend income of GBP 5,000 is fully taxable (subject to the GBP 500 dividend allowance). The PA cannot be applied against dividends before savings because the order must be followed strictly, even though dividends are taxed at lower rates.

3. Which of the following is an example of a zero-rated supply?

   • A
     Supply of commercial property
   • B
     Financial services
   • C
     Children's clothing
     Correct answer
   • D
     Private medical treatment
   Explanation

   Children's clothing is zero-rated for VAT purposes. This means VAT is charged at 0%, but the supply counts as a taxable supply (allowing input tax recovery). Private medical treatment and financial services are exempt supplies. The supply of commercial property is exempt by default (unless the option to tax has been exercised).

• acca

  ACCA TX (Taxation): Syllabus, Pass Rates, and How to Pass

  2025-12-15