Assignment Brief

BA (Hons.) International Business & Finance

Academic Year 2018-19
Module Information:
Qualification: BA (Hons.) International Business & Finance

Module Code & Title: BAIBF 09011Business Taxation

Assignment Title: Individual Report

Component Weighting: 50%

Date of Issue: 01 Oct 2018 Due date: 8 October 2018, 5 PM

To be filled by the student:

Student ID: 4130BA17

Date of Submission: 08/ 10/ 2018

*All work must be submitted on or before the due date. If an extension of time to submit work is required, a Mitigating Circumstance
Form must be submitted.

Has an extension been approved? Yes No

If yes, please provide the new submission date ….…/.…./……., and affix appropriate evidence.

First Marker: Second Marker:

Agreed Mark: Refer: Yes / No

1|Page
General Guidelines
1. A Cover page or title page – You should always attach a title page to your assignment. Use previous page
as your cover sheet and be sure to fill the details correctly.
2. This entire brief should be attached in first before you start answering.
3. All the assignments should be prepared using word processing software.
4. All the assignments should print in A4 sized paper, and make sure to only use one side printing.
5. Allow 1” margin on each side of the paper. But on the left side you will need to leave room for binding.
6. Ensure that your assignment is stapled or secured together in a binder of some sort and send the Softcopy
of your final document to assignment.bahons2017@gmail.com.
7. The submission of your work assessment should be organized and clearly structured.

Word Processing Rules

1. Use a font type that will make easy for your examiner to read. The font size should be 12 point, and should
be in the style of Times New Roman.
2. Use 1.5-line word-processing. Left justify all paragraphs.
3. Ensure that all headings are consistent in terms of size and font style.
4. Use footer function on the word processor to insert Your Student ID, Name, Subject, Module code, and
Page Number on each page. This is useful if individual sheets become detached for any reason.
5. Use word processing application spell check and grammar check function to help edit your assignment.
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assignment.

Important Points:
1. Check carefully the hand in date and the instructions given with the assignment. Late submissions will not
be accepted.
2. Ensure that you give yourself enough time to complete the assignment by the due date.
3. Don’t leave things such as printing to the last minute – excuses of this nature will not be accepted for failure
to hand in the work on time.
4. A printed version of the assignment needs to be submitted physically along with a soft copy mailed to the
email mentioned above on or before the stated deadline.
5. You must take responsibility for managing your own time effectively.
6. If you are unable to hand in your assignment on time and have valid reasons such as illness, you may apply
(in writing) for an extension.
7. Non-submission of work without valid reasons will lead to an automatic REFERRAL. You will then be asked
to complete an alternative assignment.
8. Take great care that if you use other people’s work or ideas in your assignment, you properly reference
them in your text and any bibliography; otherwise you may be guilty of plagiarism.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
 Statement of Originality and Student Declaration

I hereby, declare that I know what plagiarism entails, namely to use another’s work and to present it as
my own without attributing the sources in the correct way. I further understand what it means to copy
another’s work.
1. I know that plagiarism is a punishable offence because it constitutes theft.
2. I understand the plagiarism and copying policy of the University of the West of Scotland.
3. I know what the consequences will be if I plagiaries or copy another’s work in any of the
assignments for this program.
4. I declare therefore that all work presented by me for every aspect of my program, will be my own,
and where I have made use of another’s work, I will attribute the source in the correct way.
5. I acknowledge that the attachment of this document signed or not, constitutes my agreement on
it.
6. I understand that my assignment will not be considered as submitted if this document is not
attached to the attached.

Student’s Signature: …………………………… Date:…08/10/2018……………

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
TASK 1

Explain self assessment of individuals and companies

Word Limit – 1500 words

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
 SELF ASSESMENT OF INDIVIDUALS AND COMPANIES

TAX ADMINISTRATION FOR INDIVIDUALS

INTRODUCTION

A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer by a
government organization in order to fund various public expenditure. An Income tax is a tax
imposed on individuals or entities that varies with respective income or profits. Income tax
generally is computed as the product of a tax rate times taxable income. Taxation rates may vary
by type or characteristics of the tax payer.

THE COLLECTION OF INCOME TAX

Employees have their income tax and national insurance liabilities in their employment income,
and in some cases on small amounts if other income, collected at course through the PAYE
system.

Self assessment is the system for the collection of tax which is not deducted through the PAYE
system.

RETURN - FILLING DEADLINE.

The deadline for submitting the return is the later of:

 31 October 2018 for a paper return.

 31 January 2019 for an electronic return.
 Tree months after the issue of the notice to file a return.

The 31 January following the end of the year is known as the ‘filling date’, regardless of
whether the return is filed on papers or electronically.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
RECORDS

Taxpayers are required to keep the records necessary to make a correct and complete return.

PENALITY FOR NOT KEEPING THE RECORDS

A penalty may be charged for failure to keep or retain adequate records.

The maximum penalty is only likely to be imposed in the most serious cases such as where a
taxpayer deliberately destroys his records in order to obstruct an HMRC compliance check.

PAYMENT OF TAX

A taxpayers is required to settle liabilities by 31 January following the end of the tax year for:

 Income tax
 Class 2 national insurance
 Class 4 national insurance
 Capital gains.

PAYMENT ON ACCOUNT

If the taxpayer had an income liability in the previous tax year in excess of any tax deducted at
source, a POA is normally required for the following year.

DUE DATE

For those taxpayers who are required to make POAs, the payment dates for tax year 20117/18
are:

 First POA – 31 January 2018

 Second POA – 31 July 2018.

Any remaining liability is then settled on 31 January 2019 due date.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
INTEREST AND PENALTIES

There are two types of interest:

 Late payment interest

– calculated at 2.75% p.a.
 Repayment interest
– calculated at 0.5% p.a.

LATE PAYMENT INTEREST

Interest will be automatically charged if any tax is paid late.

All interest is charged on a daily basis.

 From: the date the tax was due to be paid

 To: the date of payment.

REPAYMENT INTEREST

Interest may be paid by HMRC on an overpayment of tax.

If applicable, interest runs:

 From: the later of :

- the date the tax was due, or
– the date HMRC actually received the tax.
 To: the date of repayment.

PENALITIES FOR LATE PAYMENTS

PENALITIES aims to compensate for the advantage of paying late. Penalties can also be
imposed by HMRC where income tax, class2 NIC, class 4 NICE or CBT is paid late.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
Penalties are calculated as follows:

Tax paid (note) Penalty( % of tax due)

More than 1 month late 5%

More than 6 months late Additional 5%

More than 12 months late Additional 5%

COMPLIANCE CHECKS

 HMRC have the right to enquire into the completeness and accuracy of any self-
assessment tax return under their compliance check powers.
 HMRC must give written notice before commencing a compliance check.
 The written notice must be issued within 12 months of the date the return is filed with
HMRC.
 An appeal can be made against the request.
 The compliance check ends when HMRC gives written notice that it has been completed.
 The taxpayer has 30 days to appeal against any amendments by HMRC. The appeal must
be in writing.

DISCOVERY ASSESSMENT

HMRC must normally begin compliance checks into a self – assessment return within 12 months
of the date the return is filed, however a discovery assessment can be raised at a later date to
prevent the loss of tax.

The time limit for issuing a discovery assessment is :

Time from end of tax year For 2017/18

Basic time limit 4 years 5 April 2022

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
 Careless error 6 years 5 April 2024

Deliberate error 20 years 5 April 2038

PENALITIES

HMRC has standardised penalities across taxes for different offences. It applies to 2 key areas:

 Submission of incorrect returns – all taxes

 Failure to notify liability to tax.

Taxpayer behaviour Maximum penalty (%

Of Revenue lost)

Genuine mistake ( for incorrect returns only) No penalty

Failure to take reasonable care 30%

Deliberate but no concealment 70%

Deliberate with concealment 100%

PENALITIES FOR LATE FILING OF RETURNS

Date return is filed Penalty

 After due date  £ 100 fixed

 3 months late  + daily penalities of £ 10 per day.
 6 months late  + 5% of tax due.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
OTHER PENALITIES

Offence Penalty

Penalty for fraud or negligence on claiming £

reduced payments on account
POAs should have paid x

Less: POAs actually paid (x)

Failure to keep and retain required records Up to £ 3,000 per tax year

THE PAYE SYSTEM

Pay as you earn is that system used for collecting income tax and national insurance at source
from the earnings paid to employees and submit information to HMRC when employees paid.

Key PAYE forms.

Form Purpose of use Timing

P45 Provided to employee when they On going with staffing changes

leave.
P60 Provided to employee by 31 May
Year and summary following tax year

Provided by 6 July following tax

P11D
year.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
 Summary of benefits

TAX ADMINISTRATION FOR A COMPANY

THE SELF – ASSESSMENT SYSTEM FOR COMPANIES

As for individuals, self-assessment applies for corporate tax payers. Responsibility rests with the
company to :

 Calculate their own corporate tax liability for each accounting period
 Submit a self-assessment corporation tax return within 12 months after the end of the
period account.
 Pay any corporate tax due within 9 months and 1 day after the end of the accounting
period.

THE SELF – ASSESSMENT TAX RETURN

It must be submitted by the later of:

 12 months after the end of the period of account, and

 3 months after the issue of the notice to file a return.

NOTIFICATION OF CHARGEABILITY

The time limit for notifying HMRC of chargeability is 12 months from the end of the accounting
period in which the liability arises.

PENALITIES FOR FAILURE TO SUBMIT A RETURN

HMRC can impose fixed penalities and tax geared penalities for the failure to submit a return,
depending on the length of the delay in submitting the return.
5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
RECORDS

A penalty may be charged for failure to keep or retain adequate records. The maximum penalty
is only likely to be imposed in the most serious cases such as where a company deliberately
destroys its records in order to obstruct an HMRC compliance check.

DUE DATES FOR PAYMENT

The payment date for CORPORATION tax depends on the size of the company:

 For more companies which are not ‘large'

– the due date is 9 months and 1 day after the end of the accounting period.
 For ‘large’ companies
– the liability is settled by quarterly instalment payments.

DEFINITION OF A LARGE COMPANY

A large company is one whose augmented profits for the accounting period are more than £ 1.5
million.

INSTALMENT DATES

4 quarterly instalments are due

 By the14th day
 In months 7,10,13 and 16 following the start of the accounting period.

INTEREST

There are 2 key types of interest:

 Late payment interest

– calculated at 2.75% p.a.
 Repayment interest
– calculated at 0.5% p.a.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
LATE PAYMENT INTEREST

Interest is automatically charged if corporation tax is paid late.

Interest runs:

 From: the normal due date

 To: the date of payment.

REPAYMENT INTEREST

Interest is paid by HMRC on an overpayment of corporation tax.

Interest runs:

 From: the later of :

- the due date
– the date of actual payment
 To : the date of repayment.

COMPLIANCE CHECKS

It must normally begin within 12 months of the actual submission date.

If return filed Notice must be issued within 12 months

On time The actual delivery of tax return to HMRC

Late The 31 January, 30 April, 31 July or 31 October next following

the actual date of delivery of the tax return to HMRC.

DISCOVERY ASSESSMENTS

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
HMRC has The capacity to raise additional assessments, referred to as discovery assessments. It
can be raised at a later date to prevent the loss of corporation tax.

The time limit for making a discovery assessment is :

Time from end of the CAP

Basic time limit 4 years

Careless error 6 years

Deliberate error 20 years

A discovery assessment may be appealed against.

BIBLIOGRAPHY

 ACCA TAXATION F16 (TX) ,KAPLAN PUBLISHING.

 Wikipedia.

5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011
5
Student ID : 4130BA17
Name :Digna Maria Jose
Subject : Business Taxation
Module code :09011