AAT MOCK 2 1.7 and 1.10

Ushamz
Ushamz Registered Posts: 2
Please could you help me figure out the answers for the following AAT mock 2 questions. I have attached both the questions and answers.

1.7 b) I don't understand how the mark scheme have come to those answers

1.10 a and b) I cannot understand how to calculate these questions

Best Answer

  • PeterC
    PeterC Registered, Tutor Posts: 236
    Answer ✓
    1.7b
    tax due 31/1/22

    31/3/22
    7 months late
    5% penalty after 30 days
    5% penalty after 6 months
    Total penalty = 10% x £12,000 = £1,200

    31/3/22
    14 months late
    Penalties as above, plus 5% after 12 months
    Total penalty = 1,200 + (5% x 12,000) = £1,800


    1.10a
    2015/16 disposal does not qualify for Entrepreneurs Relief
    2020/21 disposal does qualify, so tax rate is 10%
    Tax = 10%(500,000 - 12,300) = £48,770

    1.10b
    Relief available for assets acquired up to 12 month before disposal (ie. the factory)
    £350,000 proceeds from factory but only £325,000 invested, so £25,000 (350,000 - 325,000) chargeable
    Relief = 75,000 - 25,000 = £50,000
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