Statutory obligations, time limits and the implications of non-compliance: formula sheet

Key formulas

Notification of chargeability (individual)

Deadline = 5 October after the end of the tax year of chargeability

Applies if you are chargeable and have not received a notice to file a return.

Individual return deadlines

Paper: 31 October after the tax year. Online: 31 January after the tax year

Online filing gives three extra months, so it is the usual exam answer.

Individual payment dates

Payments on account: 31 January in the tax year and 31 July after it. Balancing payment: 31 January after the tax year

Underpaid tax carries interest at the rate in the tax tables, 8.50%.

Company return

Filing deadline = 12 months after the end of the accounting period

Notify HMRC within three months of the start of first chargeable activity.

Company payment

Due date = 9 months and 1 day after the end of the accounting period

Large companies pay quarterly instalments. The tax tables give a profit threshold of £1,500,000.

Record keeping

Individual in business or letting: 5 years after 31 January filing deadline. Other individuals: 1 year after it. Company: 6 years from the end of the accounting period

State the period and the starting point.

VAT registration and late payment

Register when taxable turnover exceeds £90,000 (deregister limit £88,000). Late payment: up to 15 days none; 16 to 30 days 3%; over 30 days 6% plus a daily penalty at an annual rate of 10%

These figures come from the tax tables supplied in the exam.

Interest on tax

Interest = tax × rate × months late ÷ 12

Underpaid tax 8.50%, overpaid tax 3.50%. Work to the nearest month and nearest £.

Error penalty

Penalty = potential lost revenue × penalty percentage

Potential lost revenue is the extra tax due because of the error. The percentage depends on behaviour and disclosure.

Maximum penalty by behaviour

Careless 30%; Deliberate but not concealed 70%; Deliberate and concealed 100%

These are the maximums in the ACCA tax tables.

Minimum penalty, unprompted disclosure

Careless 0%; Deliberate not concealed 20%; Deliberate and concealed 30%

Applies if the taxpayer discloses before HMRC is about to discover the error.

Minimum penalty, prompted disclosure

Careless 15%; Deliberate not concealed 35%; Deliberate and concealed 50%

Applies if the disclosure is made after HMRC has reason to suspect the error.

VAT late payment penalty

Up to 15 days: none; 16 to 30 days: 3%; over 30 days: 6% plus daily penalty at an annual rate of 10%

Taken from the tax tables. Percentages apply to the unpaid VAT.

Interest on tax

Interest = tax unpaid × rate × months or days late ÷ period

Assumed rates: underpaid tax 8.50%, overpaid tax 3.50%. Official rate 3.75% is used for benefits, not for late tax.

VAT registration limit

Register if taxable supplies exceed £90,000

Applies to the rolling 12 months (historic test). Exempt supplies are excluded.

Future test

Register if taxable supplies are expected to exceed £90,000 in the next 30 days alone

Notify by the end of the 30 days. Effective from the date you realised.

Deregistration limit

May deregister if taxable supplies in the next 12 months are expected to be £88,000 or less

Given in the tax tables.

Late payment penalty

Up to 15 days late: nil. 16 to 30 days: 3%. Over 30 days: 6% plus a daily penalty at an annual rate of 10%

Applied to the VAT unpaid. Taken from the tax tables.

Historic test notification

Notify within 30 days of the end of the month in which the limit was exceeded

Registration is effective from the first day of the second month after the month of breach, or an earlier agreed date.

Standard rate

20%

Given in the tax tables.

SDLT rates on non-residential property

£0 – £150,000: 0%; £150,001 – £250,000: 2%; £250,001 and above: 5%

Slice basis. Apply each rate only to the part of the price in that band. These rates are in the ACCA tax tables.

SDLT on a price above £250,000

SDLT = £2,000 + 5% × (price − £250,000)

The £2,000 is 2% × £100,000 for the middle band. The nil band gives nothing.

SDLT on a price between £150,000 and £250,000

SDLT = 2% × (price − £150,000)

Use only the 2% slice.

SDLT return and payment deadline

Effective date (usually completion) + 14 days

File the return and pay the tax by this date. The deadline is not in the tax tables, so learn it.

Stamp duty on shares

0.5% × consideration, rounded up to the nearest £5

Paid by the buyer. The 0.5% rate is in the tax tables. The rounding up to the nearest £5 is not in the tables, so show it as a separate step.

Late SDLT compliance

Penalties and interest can arise. Interest rates in the tax tables: 8.50% on underpaid tax, 3.50% on overpaid tax

The tax tables do not give SDLT penalty amounts. Use any figures provided in the question rather than relying on memorised amounts.

Standard annual allowance

2022/23 = £40,000; 2023/24 to 2025/26 = £60,000

Take the figure from the tax tables. Carry forward needs each earlier year's own allowance.

Tapering tests

Taper applies only if threshold income > £200,000 AND adjusted income > £260,000

If threshold income is £200,000 or less, there is no taper, however high adjusted income is.

Tapered annual allowance

Allowance = £60,000 − ((adjusted income − £260,000) ÷ 2), minimum £10,000

The maximum reduction is £50,000. It is reached when adjusted income is £360,000.

Threshold income

Net income − gross personal pension contributions (relief at source)

Employer contributions do not reduce threshold income. Treat salary sacrifice carefully, as the question directs.

Adjusted income

Net income + employer contributions + employee contributions under net pay arrangements

A relief at source contribution is already outside net income, so do not double count it.

Excess before carry forward

Pension input − annual allowance for the year

If this is zero or negative, there is no charge and unused allowance can be carried forward.

Carry forward

Unused allowance = allowance for that year − pension input for that year, for each of the previous 3 years

Use the current year first, then the earliest of the three years. Needs scheme membership in the year.

Annual allowance charge

Excess after carry forward × marginal rate(s), as the top slice of income

Report on the self assessment return. Scheme pays may be used in some cases.

Relief on personal contributions

Gross contribution qualifying for relief ≤ higher of relevant earnings and £3,600

Relief at source: pay 80% net, then gross up by 100 ÷ 80. Employer contributions are not capped by earnings in this way.

Quick revision

• VAT standard rate is 20%; the registration limit is £90,000 and the deregistration limit is £88,000.
• VAT late payment penalties: none up to 15 days late, 3% for 16 to 30 days, and 6% plus a daily penalty at an annual rate of 10% beyond 30 days.
• Non-residential SDLT: 0% to £150,000, 2% from £150,001 to £250,000, 5% above £250,000.
• Stamp duty on shares is 0.5%.
• Error penalty maximums: deliberate and concealed 100%, deliberate but not concealed 70%, careless 30%.
• Minimum error penalties are lower for unprompted disclosure than for prompted disclosure, and careless errors can fall to 0% if disclosed unprompted.
• Interest rates in the tables: underpaid tax 8.50%, overpaid tax 3.50%.
• Annual allowance is £60,000 for 2023/24 to 2025/26; the minimum is £10,000, with a threshold income limit of £200,000 and an income limit of £260,000.
• Statutory residence test: under 16 days is automatically not resident, and 183 days or more is automatically resident.
• Between those limits, the number of UK ties needed depends on days in the UK and whether the person was previously resident.
• The tax tables and the Finance Act 2025 are the basis for the exam. Do not use rates from memory of earlier years.
• In every answer, state the rule, apply it to the facts and give a clear recommendation.

Common mistakes

• Mixing up the 5 October notification date with the 31 January filing date. Fix: Link 5 October to telling HMRC you are chargeable. Link 31 January to the online return and payment.
• Giving the company payment date as 12 months after the period end. Fix: Remember filing is 12 months. Payment is 9 months and 1 day for companies that are not large.
• Applying the penalty percentage to the income omitted instead of the extra tax. Fix: Always compute the tax on the omitted income first. That is the potential lost revenue and the penalty base.
• Treating interest as a penalty or leaving it out. Fix: Show penalty and interest as two separate lines. Interest compensates for delay and is charged as well.
• Using the tax year or accounting year instead of a rolling 12 months for the historic test. Fix: Always add the last 12 months ending at each month end, and test each month.
• Counting exempt supplies towards the £90,000 limit. Fix: Include only taxable supplies, which means standard-rated, reduced-rated and zero-rated.
• Applying one rate to the whole price, for example 5% × £400,000. Fix: Treat non-residential SDLT like income tax bands. Tax each slice at its own rate and add the results.
• Giving a 30-day deadline for the SDLT return and payment. Fix: Use 14 days from the effective date (usually completion) for both filing and paying.
• Applying the taper when only one test is met. Fix: Always test threshold income over £200,000 first. Both tests must be met before you reduce the allowance.
• Using £60,000 for every carry forward year. Fix: Use £40,000 for 2022/23 and £60,000 for 2023/24 to 2025/26, as the tax table shows. Check whether an earlier year was tapered, too.

Exam tips

• Write exact calendar dates for the client, not only the rule. Markers reward application to the scenario.
• Use the tax tables for VAT penalties, interest rates and the instalment threshold. Do not rely on memory for these figures.
• If the question asks for advice, state the action the client should take and the risk of delay. This earns professional skills marks.
• Show interest workings in one line with the rate, tax and months. Round to the nearest £ as the supplementary instructions require.
• Check whether the taxpayer is an individual, a company or a VAT-registered business before quoting a deadline.
• Open the tax tables and use Table 19 for error penalties. Do not rely on memory for percentages.
• Always name the behaviour and give a reason from the scenario. Marks are given for the reasoning, not only the figure.
• Show interest and penalties on separate lines, and total them if the question asks for the cost.