100+ Free ICAEW Principles of Taxation Practice Questions

Objectives, types of tax and ethics

The purpose and objectives of taxation, classification of taxes (direct vs indirect, progressive vs regressive), the structure and role of HMRC, and the ethical framework: the five fundamental principles, threats and safeguards, conflicts of interest, money laundering, and the distinction between tax avoidance and tax evasion.

Administration of taxation

Self-assessment for individuals and companies, filing deadlines, payment dates and payments on account, interest and penalties for late filing and late payment, HMRC enquiry and information powers, appeals, and record-keeping obligations.

Income tax and National Insurance

Income tax computation across employment, trading and property income, the personal allowance and its restriction, the basic, higher and additional rate bands, savings and dividend allowances, and National Insurance contributions for employees (Class 1), employers (Class 1 and 1A) and the self-employed (Class 2 and Class 4).

Capital gains tax and inheritance tax

Computing chargeable gains and losses, allowable costs, the annual exempt amount, part disposals and chattels, key reliefs such as business asset disposal relief and private residence relief, and the basic principles of inheritance tax on lifetime transfers and death estates.

Corporation tax

Computing taxable total profits and the corporation tax liability, adjusting accounting profit to trading profit (disallowable expenses, capital items), capital allowances on plant and machinery including the annual investment allowance and writing-down allowances, and chargeable gains for companies.

VAT and stamp taxes

VAT registration and deregistration thresholds, output and input VAT, recoverable and irrecoverable input VAT, the standard, reduced, zero-rated and exempt supply categories, special schemes (cash accounting, annual accounting, flat rate), VAT returns and payment, and the principles of stamp taxes on shares and land.