Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Appropriateness of planning measures to a taxpayer's circumstances and objectives

Priya's company deliberately and with concealment understated its corporation tax. Potential lost revenue is £90,000. HMRC discovered the error and Priya's company then made a prompted disclosure. What is the maximum and minimum penalty range?

The penalty range is £45,000 to £90,000. For deliberate and concealed behaviour the maximum is 100% and the minimum for prompted disclosure is 50%, applied to £90,000 of potential lost revenue. The 30% minimum applies only to unprompted disclosure.

  1. A£27,000 to £90,000
  2. B£45,000 to £90,000Correct
  3. C£18,000 to £63,000
  4. D£31,500 to £63,000

Explanation

Deliberate and concealed behaviour has a maximum of 100% and a prompted minimum of 50%. 50% x £90,000 = £45,000 and 100% x £90,000 = £90,000. The £27,000 lower figure uses the 30% unprompted minimum, which is wrong here.

Did you get it right without looking?

One question tells you little. A timed set on Appropriateness of planning measures to a taxpayer's circumstances and objectives shows your real accuracy, how long you take and where you lose marks.

Practise Appropriateness of planning measures to a taxpayer's circumstances and objectivesFree diagnostic mock

More Appropriateness of planning measures to a taxpayer's circumstances and objectives questions