International School of Economics

Lecturer: Elnur Ibrahimov

Course: Vergi Əməliyyatlarının Uçotu

Final Exam Questions

1. What are the main factors influence the government’s tax policies? Explain briefly.
2. What is the difference between a direct and an indirect tax? Demonstrate the examples.
3. What are tax evasion and tax avoidance?
4. What are the state taxes in the Republic of Azerbaijan?
5. What are the main elements of taxation and taxpayers determined in order to the tax shall be
considered as instituted. (According to Azerbaijan Republic Tax Code)

6. In 2015/16, John has taxable trading income of £X, savings income of £X (gross) and dividend
income of £X (gross). John pays interest of £X in 2015/16 on a loan to invest in a partnership.
What is John’s net income for 2015/16 (According to UK Tax System, ACCA F6)
7. In 2015/16, Blear receives employment income of £X, bank interest of £X and dividends of £X.
Calculate Clare's taxable income for 2015/16. (According to UK Tax System, ACCA F6)
8. In 2015/16 Julian has employment income of £X, receives bank interest of £X and dividends of
£X. Calculate Julian's tax liability for 2015/16. (According to UK Tax System, ACCA F6)
9. What is the amount of the tax credit received with a dividend? Can the tax credit be repaid?
10. How is dividend income taxed? (According to UK Tax System, ACCA F6)
11. Income tax rate in the Republic of Azerbaijan and explain the calculation of income tax.
12. If a person gets X AZN monthly income, how much the income tax will be calculated. (According
to Azerbaijan Republic Tax Code)
13. Jason uses her own car for business travel. During 2015/16, Jason drove X miles in the
performance of her duties. Jason’s employer paid his a mileage allowance. How is the mileage
allowance treated for tax purposes assuming that the rate paid is:
X p a mile? (According to UK Tax System, ACCA F6)
14. What relief can Karen claim if she is paid X for each mile that she drives her own car on company
business and she drives X miles in 2015/16?
15. On what basis are earnings taxed?
16. What is the objective PAYE system? (According to UK Tax System, ACCA F6)

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17. How PAYE system works

18. Olga has earnings of £X in 2015/16. She pays a personal pension contribution of £X (net). He has
no other taxable income. Show Olga’s tax liability for 2015/16. (According to UK Tax System,
ACCA F6)
19. Maxine has taxable earnings of £X in 2015/16. Her employer deducts a pension contribution of
£X from these earnings before operating PAYE. She has no other taxable income. Show Maxine's
tax liability for 2015/16.
20. Archie is employed by M plc and is paid a salary of £X in 2015/16. He starts receiving childcare
vouchers from M plc worth £X per week for his daughter in June 2015 and receives them for X
weeks during 2015/16. What is Archie's employment income for 2015/16?
21. What is carry forward and carry back in tax system?
22. Sylvia owns a house near the sea in Norfolk. She has a spare bedroom and during 2015/16 this
was let to a chef working at a nearby restaurant for £X per week which includes the cost of
heating and electricity. Sylvia estimates that her lodger costs her an extra £X on gas, £X on
electricity, and £X on buildings insurance each year. The wear and tear allowance applicable
under the normal method would be £X. What is Sylvia's property income for 2015/16?
(According to UK Tax System, ACCA F6)
23. Janet granted a lease to Jack on 1 March 2016 for a period of X years. Jack paid a premium of
£14,000. How much of the premium received by Janet is taxed as property income? (According
to UK Tax System, ACCA F6)
24. What are the property taxable base in the Republic of Azerbaijan?
25. What is the property tax rate of physical persons in Azerbaijan and explain the calculation of
property tax liability..
26. In which circumstance the gain is chargeable and what are the chargeable disposals?
27. Please, clarify the incidental costs of disposal and which costs might be included to the incidental
costs?
28. Please clarify the allowable costs and which costs might be included to the allowable costs?
29. Jackson bought a piece of land as an investment for £Z. The legal costs of purchase were £X .
Joanne spent £ Y on installing drainage pipes on the land which enhanced its value. Jackson sold
the land on 30 November 2015 for £L.. He incurred estate agency fees of £K and legal costs of £P
on the sale. Calculate Jackson’s gain on sale. (According to UK Tax System)
30. Cenka has taxable income of £L in 2015/16. She made personal pension contributions of £K
(net) per month during 2015/16. In December 2015, she makes a chargeable gain of £J. The gain
does not qualify for entrepreneurs' relief. Calculate the CGT payable by Mo for 2015/16.
(According to UK Tax System).
31. Mr John owns a four hectare plot of land which originally cost him £L. He sold one hectare in July
2015 for £K. The incidental costs of sales were £Q. The market value of the three hectares
remaining is estimated to be £A. What is the gain on the sale of the one hectare?

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32. Sevil bought an asset for £Q. It was destroyed in July 2015. Insurance proceeds were £I, and Sevil
spent £H on a replacement asset in January 2016. Compute the gain immediately chargeable and
the base cost of the new asset.
33. What is the chattel in tax accounting? And clarify the gains on non-wasting chattels?
34. How are gains on non-wasting chattels sold for more than £KJL restricted? And how are losses
on non-wasting chattels sold for less than £6,000 restricted? (explain comprehensively)

35. Please, define entrepreneurs' relief and what is the tax rate on the gains on assets qualifying for
the relief?
36. A freehold factory was purchased by John for business use in August 2006. It was sold in
December 2015 for £DPF giving rise to a gain of £PQP. A replacement factory was purchased in
June 2016 for £PFP. Compute the base cost of the replacement factory, taking into account any
possible rollover of the gain from the disposal in December 2015.
37. Patrick has been running a trading business for five years. In 2015/16 he sold the business to
Andrew realizing gains of £POP. Patrick has already used his annual exempt amount for
2015/16 against other gains. He had not made any previous claim for entrepreneurs' relief.
What is Patrick's CGT liability?
38. Sevil sells a factory for £AQA realising a gain of £POAP. She acquires a factory two months later
for £X. How much rollover relief is available?

39. Toma is a self employed writer who paid tax for 2014/15 as follows:
i. £
ii. Total amount of income tax charged P
iii. This included: Tax deducted on savings income Q
iv. She also paid: Class 4 NIC O
i. Capital gains tax F
v. How much are the payments on account for 2015/16 and by what dates are they
due?

40. Giles made payments on account for 2015/16 of £O each on 31 January 2016 and 31 July 2016,
based on his 2014/15 liability. He then calculates his total income tax and Class 4 NIC liability
for 2015/16 at £A of which £B was deducted at source. In addition he calculated that his CGT
liability for disposals in 2015/16 is £5,120 and his Class 2 NIC for 2015/16 is £U. What is the
final payment due for 2015/16?

41. Explain the circumstance in which orders the tax arrears payable to the Budget shall be paid.
(According to the Tax Code of the Republic of Azerbaijan)

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42. Explain the situation of refund of overpaid taxes, interests and financial sanctions. (According to
the Tax Code of the Republic of Azerbaijan)
43. As we knew a taxpayer shall be served a notice about the assessment of a tax. What shall such a
notice indicate? (According to the Tax Code of the Republic of Azerbaijan)
44. Demonstrate the Procedure for calculation and payment of tax by the taxpayer (According to the
Tax Code of the Republic of Azerbaijan).
45. What are the fulfillment of tax obligations?
46. If the taxpayer did not implement the tax obligation within timeframe specified by the Tax Code
of the Republic of Azerbaijan, in which procedure will organized by the Tax Authority?

47. Clarify the article of “Income from activity that is not connected with employment” and
demonstrate what are the included to the income from entrepreneurial activity. (According to
the Tax Code of the Republic of Azerbaijan)
48. Define the Income from non-entrepreneurial activity and what kind of income is included to this
activity? (According to the Tax Code of the Republic of Azerbaijan)
49. What are exemptions and privileges on income tax? (According to the Tax Code of the Republic
of Azerbaijan)
50. Explain the situation, in which case and for whom the monthly taxable income from any type of
employment shall be reduced by the amount of 400 manats? (According to the Tax Code of the
Republic of Azerbaijan)
51. What are the requirements for submission of application on registration for VAT (According to
the Tax Code of Azerbaijan Republic)
52. What is the main purpose of voluntary registration of VAT? How shall the registration be
canceled? (According to the Tax Code of Azerbaijan Republic)
53. What are the main exemptions of VAT and value added taxation at a zero (0) rate? Please, clarify
respectively. (According to the Tax Code of Azerbaijan Republic)

54. Explanation of filing of tax returns and payment of VAT? (According to the Tax Code of
Azerbaijan Republic)

55. Vladimira started to trade cutlery on 1 January 2015. Sales (excluding VAT) were £X a month for
the first eight months and £X a month thereafter. Please, explain from what date should
Vladimira be registered for VAT?

56. Orco is registered for value added tax (VAT). In the quarter ended 31 October 2015 it made
taxable supplies (before taking account of any discounts) of £X, exclusive of VAT. All supplies are
standard rated (X percent). On each sales invoice, Orco offers a discount of X% to all of its

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customers who settle their invoices within 30 days. Only X% of all customers (representing a
quarter of the £X above) pay within this time. How much output VAT should Orco show on its
VAT return for the quarter ended 31 October 2015 in respect of the above supplies?

57. Salima has the following transactions in the quarter ended 31 December 2015. All amounts
exclude any VAT unless otherwise stated.

Purchases

Furniture for resale X

Restaurant bills: two-thirds for entertaining UK customers, X

one-third for entertaining non-UK customers

Petrol for car owned by Justin and used by X

an employee for business and private use

(VAT inclusive)

Sales

Furniture X

Books on interior design X

The employee uses the car provided by Justin X% for private use.

Salima has opted to use the fuel scale for the employee’s car. The appropriate fuel

scale charge for the quarter is £X inclusive of VAT. Salima is considering buying

a car for her own use which will be used for both business and private purposes.

What is the output VAT payable on the sales of furniture and books? And What is

the amount of the input VAT recoverable on the restaurant bills?

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58. Vladimira works part time for START Ltd at a salary of £X a year. She is not a director of START
Ltd. On 30 November 2015, Vladimira received a bonus of £X in respect of START's trading
results for the year ended 31 October 2015. She expects to receive a bonus of £X in November
2016 in respect of START's results for the year ended 31 October 2016. What is Vladimira's
employment income for the tax year 2015/16?

59. GLM runs a financial services business making exempt supplies. LMG runs a children’s clothing
shop making zero rated supplies. MLG runs an adult clothing shop making standard rated
supplies. Who is making taxable supplies and therefore can reclaim input VAT?

60. Over the period of the quarter ended 31 December 2015, Mike makes purchases of office items
for her business of £X and spends £X entertaining UK customers. Her sales for the period are £X.
All figures are inclusive of VAT and standard rated. What is Mike’s total VAT liability for the
quarter ended 31 December 2015?

61. Cenka purchased a ten-acre plot of land in May 2009 for £X. In January 2016, Cenka sold three
of the acres for £X with expenses of sale amounting to £X. The market value of the remaining
seven acres of land in January 2016 was £X. What is Cenka’s chargeable gain on the disposal of
the three acres of land in the tax year 2015/16?

62. Salima has the following gains and losses arising from disposals of chargeable assets:

Tax year 2013/14 2014/15 2015/16

£ £ £

Gains X X X

Losses X X X

How much will be the allowable loss carried forward to 2016/17?

63. What are the exemptions and privileges of Profit tax from legal persons? (According to the Tax
Code of Azerbaijan Republic)

64. In a VAT pend, BMW Ltd. sells $X of goods excluding VAT. It purchases Vatable goods and
services for $X including VAT. The company also bought a machine for $X excluding VAT. All VAT
is at X% and is recoverable.

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a) The output VAT, to the nearest $X, posted to the VAT Account will be.
b) The input VAT, to the nearest $X, posted to the VAT Account will be.
c) The Balance on the VAT Account will be.

65. Vladimira is a UK value added tax (VAT) registered trader. She sold goods with a VAT exclusive
price of £X to Salima in February 2016. Salima runs a business in Germany and is VAT registered
in that country. Vladimira quoted the Salima’s VAT number on the invoice and has proof of
delivery to him in Germany. The rate of VAT in Germany on the goods would be X%. What is the
VAT that Vladimira must charge on this supply?

66. START Ltd sells a warehouse for £X. The warehouse cost £X and the indexation allowance
available is £X. The company acquires another warehouse ten months later for £X. What is the
amount of rollover relief?

67. Salima works for Start Ltd for an annual salary of £X. On 30 September 2015, she received a
bonus of £X in respect of Start Ltd’s trading results for the year ended 31 March 2015. She
expects to receive a bonus of £X on 30 September 2016 in respect of Start Ltd’s results for the
year ended 31 March 2016. Judith also received £X from a customer on 1 December 2015 as a
gratuity for good service. What is Salima’s employment income for the tax year 2015/16?

68. Alex is a sole trader who had trading income of £X in the tax year 2014/15 and £X in the tax year
2015/16. He joined a personal pension scheme on 6 April 2014 and made gross contributions of
£X in 2014/15. This was the first pension provision that Alex had made. What gross amount can
Alex contribute to his personal pension scheme in March 2016 without incurring an annual
allowance charge?

69. What is the procedure for the calculation and payment of the property tax of physical persons
and of enterprises? (According to the Tax Code of Azerbaijan Republic)

70. Explain comprehensively the rights of State Tax Authorities? (According to the Tax Code of
Azerbaijan Republic)

71. Explain comprehensively value of a Taxable Operation and volume of the Taxable Import of VAT
in accordance with the Tax Code of Azerbaijan Republic.

72. START is registered for value added tax (VAT). On 1 January 2016 START purchased a motor car
costing £X (inclusive of VAT) for the use of its managing director for business and private

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purposes. The private use is estimated to be X%. The managing director is provided with free
petrol for business and private mileage which cost START £X (exclusive of VAT). L Ltd wishes to
use the fuel scale charge: the relevant quarterly VAT inclusive scale charge is £X. What is
START’s VAT repayment in respect of the motor car and the fuel for the quarter ended 31 March
2016?
73. START Ltd prepared a value added tax (VAT) return for the quarter ended 31 May 2015 which
showed net VAT payable of £X. By which dates should this return have been submitted to HM
Revenue and Customs (HMRC) and the payment made to HMRC?

74. NAR Ltd is registered for value added tax (VAT) and uses the flat rate scheme. In its VAT quarter
ended 30 June 2015 it had a tax inclusive turnover of £X. This comprises of standard rated sales
of £X, zerorated sales of £X and exempt sales of £X. The flat rate scheme percentage for the
company’s trading sector is X%. How much the VAT payable by NAR ltd for the quarter ended 30
June 2015?

75. Please, explain comprehensively the procedure of the compulsory registration of VAT in
accordance with the UK Tax System (ACCA F6)