AAT Level 4 - Professional Diploma in Accounting Business Tax Computations Questions and Answers

Question 1

A UK limited company purchases a new, unused electric car for £45,000 and a new petrol delivery van for £35,000 during its accounting period.
The company has a main pool written down value brought forward of £20,000.
The Annual Investment Allowance (AIA) limit is £1,000,000.
What is the maximum amount of capital allowances the company can claim in this period?

Accepted Answer

£83,600

Answer

£80,000

Answer

£100,000

Answer

£48,600

Question 2

Which one of the following is a disallowable expense when computing the trading profits of a UK company for corporation tax purposes?

Accepted Answer

Depreciation of office equipment

Answer

Staff salaries and wages

Answer

Rent paid for the business premises

Answer

Interest paid on a business loan

Question 3

A business has a rolling 12-month taxable turnover that has just exceeded £90,000 for the first time at the end of May. According to HMRC rules, by when must the business register for VAT?

Accepted Answer

By the 30th of June, with registration effective from the 1st of July.

Answer

Immediately on the day the threshold was exceeded.

Answer

Within 14 days of the end of May.

Answer

The business can wait until its year-end to register.

Question 4

A UK limited company has taxable total profits of £300,000 for its financial year. The main rate of corporation tax is 25% and the small profits rate is 19%. What is the company's corporation tax liability?

Accepted Answer

£75,000

Answer

£57,000

Answer

£79,500

Answer

£62,500

Question 5

Which of the following is LEAST likely to be considered one of HMRC's 'badges of trade' when determining whether a business activity constitutes a trade?

Accepted Answer

The personal wealth of the person conducting the activity.

Answer

The length of the period of ownership of an asset.

Answer

The frequency and number of similar transactions.

Answer

The existence of a profit-seeking motive.

Question 6

A UK company incurs a trading loss of £40,000 in its current accounting period. In the immediately preceding 12-month period, it had taxable total profits of £60,000. What is the primary option available to the company for the relief of this loss?

Accepted Answer

Carry the loss back against the total profits of the preceding 12 months.

Answer

Carry the loss forward to set against future trading profits only.

Answer

The loss can only be set against current year chargeable gains.

Answer

Carry the loss back for a maximum of 36 months against total profits.