Additional Information
Book Details
Abstract
This edition brings the book completely up to date with the provisions of the Finance Act 2017, including:
• Making Tax Digital (MTD)
• Revised Budget timetable
• Income tax in Scotland
• Cash basis for property businesses
• Employee shareholder status
• Taxation of termination payments
• The cash basis threshold
• Enabler penalties
• Reform of corporate loss relief
• Corporate interest expense restriction
• IHT main residence nil-rate band
• Deemed domicile
This book will be of value to both undergraduate and professional students of business and accounting, and will be particularly useful for students preparing for the following examinations:
ICAEW Certificate Level, Principles of Taxation; ACCA Fundamentals Level, Taxation; ACCA Technician Scheme, Foundations in Taxation; CIPFA Diploma Stage, Taxation; AAT Professional Diploma, Personal Tax and Business Tax; ATT Certificates, Personal Taxation; Business Taxation and Accounting Principles; AIA Foundation Level, Auditing and Taxation; IFA Level 4, Tax for SMEs.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Front Cover\r | Front Cover | ||
| Title Page\r | iii | ||
| Copyright Page\r | iv | ||
| Contents\r | v | ||
| Preface | ix | ||
| Acknowledgements | x | ||
| Summary of tax data | xi | ||
| Part 1 Income Tax and National Insurance | 1 | ||
| 1 Introduction to the UK tax system | 3 | ||
| UK taxes | 3 | ||
| Sources of tax law | 4 | ||
| The tax year | 6 | ||
| Structure of HM Revenue and Customs | 6 | ||
| Administration of the tax system | 7 | ||
| Self Assessment | 7 | ||
| Appeals | 11 | ||
| Tax evasion | 12 | ||
| Tax avoidance | 12 | ||
| Making Tax Digital | 14 | ||
| The HMRC Charter | 14 | ||
| 2 Introduction to income tax | 16 | ||
| Taxable persons | 16 | ||
| Classification of income | 17 | ||
| Exempt income | 18 | ||
| Structure of an income tax computation | 19 | ||
| Married couples and civil partners | 20 | ||
| Rates of income tax for 2017-18 | 20 | ||
| Income taxed at source | 22 | ||
| Savings income | 23 | ||
| Dividend income | 30 | ||
| 3 Personal allowances | 36 | ||
| Personal allowances for 2017-18 | 36 | ||
| The personal allowance | 37 | ||
| Blind person's allowance | 40 | ||
| Tax reducers | 40 | ||
| Married couple's allowance | 40 | ||
| 4 Payments and gifts eligible for tax relief | 47 | ||
| Payments and gifts deductible from total income | 47 | ||
| Eligible interest payments | 52 | ||
| Annual payments | 53 | ||
| Gifts of shares or property to charity | 53 | ||
| Payments which are tax reducers | 54 | ||
| Maintenance payments | 54 | ||
| Loans used to purchase a life annuity | 55 | ||
| Gifts of pre-eminent property to the nation | 55 | ||
| Gift Aid | 56 | ||
| 5 Income from property | 60 | ||
| Definition of property income | 60 | ||
| Basis of assessment and allowable expenditure | 61 | ||
| Capital expenditure | 62 | ||
| Losses | 64 | ||
| Lease premiums | 65 | ||
| Rent-a-room\" relief | 67 | ||
| Furnished holiday lettings | 67 | ||
| 6 Income from savings and investments | 72 | ||
| Interest received | 72 | ||
| Dividends received | 74 | ||
| Tax-efficient investments | 74 | ||
| Individual Savings Accounts | 75 | ||
| Enterprise Investment Scheme | 77 | ||
| Venture Capital Trusts | 78 | ||
| Child Trust Funds | 79 | ||
| Income from trusts and settlements | 80 | ||
| Miscellaneous income | 83 | ||
| 7 Income from employment (1) | 86 | ||
| Employment and self-employment | 86 | ||
| Basis of assessment | 89 | ||
| Employment income | 89 | ||
| Non-taxable employment income | 90 | ||
| Deductible expenses | 92 | ||
| Payments made on termination of employment | 95 | ||
| The PAYE system | 97 | ||
| Construction industry scheme | 101 | ||
| Employee incentive schemes | 102 | ||
| 8 Income from employment (2) | 107 | ||
| Benefits in kind | 107 | ||
| Living accommodation | 109 | ||
| Cars provided for private use | 112 | ||
| Beneficial loans | 116 | ||
| Salary sacrifice | 118 | ||
| 9 Income from self-employment: Computation of income | 120 | ||
| The badges of trade | 120 | ||
| The calculation of trading profits | 122 | ||
| Deductibility of expenditure | 123 | ||
| Disallowed expenditure | 123 | ||
| Allowable expenditure | 126 | ||
| Adjustments relating to income | 128 | ||
| Trading income allowance | 129 | ||
| Cash basis and simplified expenses | 130 | ||
| 10 Income from self-employment: Basis periods | 136 | ||
| The current year basis | 136 | ||
| Commencement of trade | 137 | ||
| Cessation of trade | 140 | ||
| Change of accounting date | 142 | ||
| Averaging of trading profits for farmers and creative artists | 147 | ||
| 11 Income from self-employment: Capital allowances | 153 | ||
| Eligible expenditure | 153 | ||
| Chargeable periods | 153 | ||
| Plant and machinery | 154 | ||
| Capital allowances on plant and machinery | 156 | ||
| Writing down allowance | 157 | ||
| Annual investment allowance | 160 | ||
| First year allowance | 163 | ||
| Balancing allowances and charges | 165 | ||
| Non-pooled assets | 165 | ||
| Allowances on cessation of trade | 170 | ||
| Miscellaneous capital allowances | 171 | ||
| 12 Income from self-employment: Trading losses | 177 | ||
| Relief for trading losses | 177 | ||
| Carry-forward trade loss relief | 178 | ||
| Trade loss relief against total income | 180 | ||
| Early trade losses relief | 183 | ||
| Terminal trade loss relief | 185 | ||
| Post-cessation trade relief | 187 | ||
| Transfer of a business to a company | 187 | ||
| Losses on shares in unlisted trading companies | 187 | ||
| Limit on income tax reliefs | 188 | ||
| 13 Income from self-employment: Partnerships | 191 | ||
| Principles of partnership taxation | 191 | ||
| Notional profits and losses | 194 | ||
| Change in partnership composition | 195 | ||
| Non-trading income | 197 | ||
| Trading losses | 198 | ||
| 14 Pension contributions | 203 | ||
| Registered pension schemes | 203 | ||
| Tax relief for contributions by scheme members | 205 | ||
| Tax relief for contributions by employers | 208 | ||
| Annual allowance charge | 210 | ||
| Lifetime allowance charge | 213 | ||
| 15 Payment of income tax, interest and penalties | 218 | ||
| Payment of income tax | 218 | ||
| Late payment penalties | 221 | ||
| Interest on overdue income tax | 222 | ||
| Interest on overpaid income tax | 223 | ||
| Penalties | 223 | ||
| 16 National Insurance contributions | 227 | ||
| Class 1 | 227 | ||
| Class 1A | 233 | ||
| Class 1B | 233 | ||
| Class 2 | 234 | ||
| Class 3 | 234 | ||
| Class 4 | 235 | ||
| Annual maximum contributions | 236 | ||
| Review questions (Set A) | 240 | ||
| Part 2 Capital Gains Tax | 249 | ||
| 17 Introduction to capital gains tax | 251 | ||
| Chargeable persons | 251 | ||
| Chargeable assets | 252 | ||
| Chargeable disposals | 253 | ||
| Basis of assessment | 254 | ||
| Rates of CGT | 255 | ||
| Relief for capital losses | 257 | ||
| Relief for trading losses | 259 | ||
| Administration of CGT | 261 | ||
| 18 Computation of gains and losses | 265 | ||
| Layout of a CGT computation | 265 | ||
| Disposal value | 266 | ||
| Allowable expenditure | 266 | ||
| Part disposals | 268 | ||
| Assets with negligible value | 270 | ||
| Assets held on 31 March 1982 | 271 | ||
| 19 Chattels and wasting assets | 275 | ||
| The chattels exemption | 275 | ||
| Chattels disposed of at a loss | 277 | ||
| Part disposals of chattels | 277 | ||
| Wasting chattels | 280 | ||
| Wasting assets | 281 | ||
| Leases | 283 | ||
| 20 Shares and securities | 292 | ||
| The share matching rules | 292 | ||
| The Section 104 holding | 294 | ||
| Bonus issues | 296 | ||
| Rights issues | 298 | ||
| Capital distributions | 300 | ||
| Takeovers | 302 | ||
| Gilts and qualifying corporate bonds | 304 | ||
| 21 Principal private residence | 308 | ||
| Principal private residence | 308 | ||
| Partial exemption | 309 | ||
| Deemed residence | 310 | ||
| Letting relief | 312 | ||
| Business use | 314 | ||
| 22 CGT reliefs | 317 | ||
| Damaged assets | 317 | ||
| Destroyed assets | 320 | ||
| Replacement of business assets | 321 | ||
| Gift of business assets | 324 | ||
| Transfer of a business to a limited company | 326 | ||
| Entrepreneurs' relief | 327 | ||
| Reinvestment into EIS shares | 330 | ||
| Loans to traders | 331 | ||
| Review questions (Set B) | 334 | ||
| Part 3 Corporation Tax | 339 | ||
| 23 Introduction to corporation tax\r | 341 | ||
| Scope of corporation tax | 341 | ||
| Accounting periods | 342 | ||
| Taxable total profits | 343 | ||
| Trading income | 344 | ||
| Income from property | 349 | ||
| Income from non-trading loan relationships | 349 | ||
| Dividends received | 351 | ||
| Relief for charitable donations | 351 | ||
| Loan relationships | 352 | ||
| Long periods of account | 356 | ||
| Research and development tax relief | 358 | ||
| Intangible fixed assets | 359 | ||
| 24 Corporate chargeable gains | 363 | ||
| Chargeable disposals and chargeable assets | 363 | ||
| Basis of assessment | 364 | ||
| Computation of gains and losses | 364 | ||
| Indexation allowance | 365 | ||
| Assets held on 31 March 1982 | 368 | ||
| The rebasing election | 371 | ||
| Assets acquired before 6 April 1965 | 371 | ||
| Disposals of shares or securities | 372 | ||
| Disincorporation relief | 380 | ||
| 25 Computation and payment of the corporation tax liability | 385 | ||
| Corporation tax financial years | 385 | ||
| Rates of corporation tax | 386 | ||
| Due date of payment | 387 | ||
| Accounting for income tax deducted at source | 390 | ||
| Shadow ACT | 390 | ||
| Self Assessment | 391 | ||
| Interest on underpaid and overpaid corporation tax | 392 | ||
| Penalties | 394 | ||
| 26 Corporation tax losses | 398 | ||
| Relief for trading losses (existing legislation) | 398 | ||
| Carry forward of trade loss relief | 399 | ||
| Unrelieved charitable donations | 400 | ||
| Trade loss relief against total profits | 402 | ||
| Repayments of corporation tax | 405 | ||
| Anti-avoidance legislation | 407 | ||
| Choice of loss relief | 407 | ||
| Proposed reforms to carry forward loss relief | 408 | ||
| Non-trading losses | 409 | ||
| 27 Close companies and investment companies | 412 | ||
| Close companies | 412 | ||
| Definition of a close company | 412 | ||
| Exceptions | 415 | ||
| Consequences of close company status | 416 | ||
| Companies with investment business | 419 | ||
| Choice of business medium | 420 | ||
| Incorporation | 425 | ||
| 28 Groups of companies and reconstructions | 428 | ||
| Related 51% group companies | 428 | ||
| 51% groups | 430 | ||
| Transfer pricing | 431 | ||
| 75% groups | 432 | ||
| Group relief | 433 | ||
| Transfer of chargeable assets within a group | 436 | ||
| Capital losses | 438 | ||
| Consortia | 439 | ||
| Proposed restriction on interest relief | 441 | ||
| Company reconstructions | 441 | ||
| Review questions (Set C) | 444 | ||
| Part 4 Miscellaneous | 451 | ||
| 29 Value added tax (1) | 453 | ||
| The principle of VAT | 453 | ||
| Taxable persons | 454 | ||
| Taxable supplies | 454 | ||
| Exempt supplies | 456 | ||
| Reduced rate supplies | 457 | ||
| Zero rate supplies | 457 | ||
| The value of a supply | 458 | ||
| Imports and exports | 460 | ||
| Registration | 463 | ||
| Deregistration | 468 | ||
| 30 Value added tax (2) | 471 | ||
| Accounting for VAT | 471 | ||
| The tax point | 472 | ||
| Tax invoices | 472 | ||
| Accounting records | 473 | ||
| Special schemes | 474 | ||
| Retail schemes | 477 | ||
| Bad debts | 478 | ||
| Non-deductible input tax | 479 | ||
| Partial exemption | 481 | ||
| Administration of VAT | 483 | ||
| Penalties, surcharges and interest | 485 | ||
| 31 Inheritance tax | 490 | ||
| Chargeable transfers of value | 490 | ||
| Exempt transfers | 492 | ||
| Potentially exempt transfers | 494 | ||
| IHT payable on chargeable lifetime transfers | 496 | ||
| IHT payable on death | 498 | ||
| Valuation | 504 | ||
| Business property relief | 506 | ||
| Agricultural property relief | 507 | ||
| Administration of IHT | 507 | ||
| 32 Overseas aspects of taxation | 511 | ||
| Residence and domicile | 511 | ||
| Income tax - general rules | 514 | ||
| Double taxation relief | 515 | ||
| Income from employment | 516 | ||
| Trading income | 518 | ||
| Income from property and investments | 519 | ||
| Capital gains tax - general rules | 520 | ||
| Inheritance tax - general rules | 521 | ||
| Corporation tax - general rules | 521 | ||
| Controlled foreign companies | 524 | ||
| Double taxation relief for companies | 525 | ||
| Diverted profits tax | 529 | ||
| Review questions (Set D) | 532 | ||
| Part 5 Answers | 539 | ||
| Answers to exercises | 541 | ||
| Answers to review questions | 593 | ||
| Index | 605 | ||
| Back Cover\r | 611 |