Chartered Institute of Taxation (CIOT / CTA) Awareness: Cross-Tax Fundamentals Syllabus

Awareness: Cross-Tax Fundamentals syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Awareness: Cross-Tax Fundamentals in Chartered Institute of Taxation (CIOT / CTA), not a summary of it.

1. 1

   UK Tax System and Administration

   5 topics

   • Structure and sources of UK tax law
     • Primary and secondary legislation; HMRC powers
     • Case law, Statements of Practice and Extra-Statutory Concessions
     • Role of tribunals and the appeals hierarchy
   • Self assessment frameworks
     • Income tax and CGT self assessment cycle
     • Corporation tax CTSA and iXBRL filing
     • Notification of chargeability and registration
   • HMRC powers, compliance checks and enquiries
     • Information and inspection powers (Schedule 36)
     • Discovery assessments and time limits
     • Penalties for inaccuracies and failure to notify
   • Payment dates, interest and surcharges
   • Making Tax Digital obligations
2. 2

   Core Income Tax Computation

   4 topics

   • Computation of taxable income and the tax liability
     • Aggregation of income; personal allowance taper
     • Savings and dividend nil-rate bands
     • Order of taxation and rate bands
   • Employment income and benefits
     • Earnings, benefits code and exemptions
     • Termination payments
     • PAYE and real time information
   • Trading and property income
     • Badges of trade and basis period reform
     • Capital allowances overview
     • Property business profits and finance cost restriction
   • Reliefs and tax-efficient investments
3. 3

   Capital Gains and Inheritance Tax Basics

   4 topics

   • Capital gains tax computation
     • Chargeable assets, disposals and the annual exempt amount
     • Share matching rules and the s.104 pool
     • Business Asset Disposal Relief and rollover relief
   • Inheritance tax on death and lifetime transfers
     • PETs, CLTs and the nil-rate band
     • Business and agricultural property relief
     • Residence nil-rate band and taper
   • Reliefs, exemptions and spouse transfers
   • Interaction of CGT and IHT on the same asset
4. 4

   Corporation Tax and Indirect Taxes

   4 topics

   • Corporation tax fundamentals
     • Computation of taxable total profits
     • Loan relationships and intangible fixed assets
     • Loss relief and group basics
   • Value Added Tax essentials
     • Output and input tax; partial exemption
     • Registration, deregistration and special schemes
     • Supplies, place of supply and time of supply
   • National Insurance contributions
     • Class 1, 1A, 2 and 4 contributions
     • Employment allowance and the apprenticeship levy
   • Stamp taxes overview

Awareness: Cross-Tax Fundamentals flashcards for Chartered Institute of Taxation (CIOT / CTA)

20 of 55 cards from the Awareness: Cross-Tax Fundamentals deck — real questions with worked answers.

1. What are the three main sources of UK tax law?

   Legislation (statute such as Finance Acts and consolidating Acts like ITEPA 2003, ITTOIA 2005, CTA 2009/2010, TCGA 1992, IHTA 1984), case law (court decisions interpreting the statute), and HMRC guidance/Extra-Statutory Concessions (which are not law but indicate HMRC practice).

2. What is the difference between tax avoidance and tax evasion?

   Tax avoidance is using lawful means to reduce a tax liability (though it may be challenged under anti-avoidance rules); tax evasion is the illegal non-payment or underpayment of tax by concealment or misrepresentation, which is a criminal offence.

3. What is the purpose of the UK General Anti-Abuse Rule (GAAR)?

   To counteract tax advantages arising from arrangements that are abusive — i.e. that cannot reasonably be regarded as a reasonable course of action in relation to the relevant tax provisions (the 'double reasonableness' test).

4. Under Self Assessment, what is the filing deadline for a paper income tax return versus an online return?

   Paper returns are due by 31 October following the end of the tax year; online (electronic) returns are due by 31 January following the end of the tax year.

5. What are the two payments on account for income tax, and when are they due?

   Each payment on account is 50% of the prior year's income tax (and Class 4 NIC) liability, due on 31 January in the tax year and 31 July following the tax year, with a balancing payment due by the next 31 January.

6. When are payments on account NOT required under Self Assessment?

   When the prior year's relevant liability was less than £1,000, or when more than 80% of the prior year's tax liability was met through deduction at source (e.g. PAYE).

7. What is the UK tax year (fiscal year) for individuals?

   6 April to the following 5 April. For example, the 2024/25 tax year runs from 6 April 2024 to 5 April 2025.

8. What is a discovery assessment and when can HMRC raise one?

   An assessment HMRC raises outside the normal enquiry window when it discovers a loss of tax. It can be raised where there was careless or deliberate behaviour, or where HMRC could not reasonably have been expected to be aware of the loss from the information provided.

9. What is the normal time limit for HMRC to open an enquiry into a self assessment return filed on time?

   Within 12 months of the date the return is actually delivered to HMRC.

10. State the standard time limits for HMRC assessments depending on taxpayer behaviour.

    4 years for innocent error/normal cases, 6 years for careless behaviour, and 20 years for deliberate behaviour (or failure to notify/offshore matters).

11. What are the four types of taxpayer behaviour used in the penalty regime for errors, from least to most culpable?

    Reasonable care taken (no penalty), careless (failure to take reasonable care), deliberate but not concealed, and deliberate and concealed.

12. How is a penalty for an inaccurate return calculated?

    As a percentage of the Potential Lost Revenue (PLR). Maximum penalties are 30% (careless), 70% (deliberate not concealed) and 100% (deliberate and concealed), reduced for the quality of disclosure (telling, helping, giving access).

13. What is an information notice under Schedule 36 FA 2008?

    A formal notice by which HMRC can require a taxpayer (or a third party) to provide information or produce documents reasonably required to check the taxpayer's tax position, during a compliance check.

14. Is interest charged by HMRC on late-paid tax deductible, and from when does it run?

    Late payment interest runs from the due date to the date of payment at the official rate. For individuals it is not deductible for income tax; for companies, late-paid corporation tax interest is dealt with under the loan relationship rules.

15. What are the late filing penalties for an income tax self assessment return filed online?

    £100 immediately when late; after 3 months, £10 per day (up to 90 days); after 6 months, the greater of 5% of tax due or £300; after 12 months, a further greater of 5% or £300 (higher if deliberate).

16. What are the late payment penalties (surcharges) for income tax self assessment?

    5% of the unpaid tax if still unpaid 30 days after the due date, a further 5% after 6 months, and a further 5% after 12 months.

17. What is Making Tax Digital (MTD) and which tax did it first apply to?

    MTD requires taxpayers to keep digital records and submit returns to HMRC using compatible software. It first applied to VAT (for VAT-registered businesses above the threshold), with MTD for Income Tax Self Assessment being phased in for the self-employed and landlords.

18. Under MTD for Income Tax, how frequently must updates be submitted to HMRC?

    Quarterly digital updates of business income and expenses, followed by a final declaration after the tax year end to finalise the position (replacing the traditional annual tax return).

19. List the steps in computing an individual's income tax liability (the income tax computation framework).

    1) Classify income into non-savings, savings and dividend income; 2) deduct reliefs and the personal allowance to find taxable income; 3) apply tax rates in order (non-savings, then savings, then dividends); 4) deduct tax reducers (e.g. EIS, marriage allowance); 5) add other charges to find the liability; 6) deduct tax already paid (PAYE) to find tax payable.

20. What is the personal allowance and how is it tapered for high earners?

    A tax-free amount of income ($\pounds 12{,}570$). It is reduced by $\pounds 1$ for every $\pounds 2$ of adjusted net income above $\pounds 100{,}000$, so it is fully withdrawn once adjusted net income reaches $\pounds 125{,}140$.

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