问答题
Faure expects her new business to make a loss in its first trading period. She requires advice on the choice of year
end, on the difference between employing her husband in the business, and running the business as a partnership.
The following information has been obtained from discussions with Faure.
Faure:
- Is 44 years old and married to Ravel.
- Has not had an income tax liability since the tax year 2003/04.
- Intends to start a new business on 1 July 2012 under the trading name 'Bah-Tock'.
- 'Bah-Tock' will be Faure's only source of income.
The 'Bah-Tock' business:
- Is expected to make a loss throughout the first 12 months of trading.
- Is expected to be profitable from 1 July 2013 onwards.
Structure of the 'Bah-Tock' business:
- The business will be unincorporated.
- Faure and Ravel will both work full-time on the affairs of the business.
- Faure will either employ Ravel, and pay him a commercial salary, or the two of them will run the business as
a partnership.
Ravel:
- Is 47 years old.
- Inherited a significant portfolio of quoted shares on the death of his mother in February 2004.
- Has annual taxable income, after deduction of the personal allowance, of ￡35,000.
- This income consists of bank interest and dividends only.
Required:
(a) Explain why a year end of 30 June, as opposed to 31 March, is likely to delay the first tax year in which the
'Bah-Tock' business makes a taxable profit rather than an allowable loss.
(b) On the assumption that the 'Bah-Tock' business will have a 30 June year end, analyse the issues that Faure
and Ravel should be aware of from a tax point of view if:
(i) Faure employs Ravel;
(ii) Faure and Ravel are partners in the business and summarise your findings.
Notes in relation to part (b)
1 Your analysis should be based on the information provided and should be restricted to the situation
where the business is loss-making.
2 You should address the effect of the choice of business structure on:
- the size of the loss made by the business;
- the reliefs available to Faure and Ravel in respect of the initial losses;
- the income tax and national insurance contributions liabilities of Faure and Ravel for the tax
years 2012/13 and 2013/14.
You should assume that the tax rates and allowances of the tax year 2011/12 will continue to apply for the
foreseeable future.
end, on the difference between employing her husband in the business, and running the business as a partnership.
The following information has been obtained from discussions with Faure.
Faure:
- Is 44 years old and married to Ravel.
- Has not had an income tax liability since the tax year 2003/04.
- Intends to start a new business on 1 July 2012 under the trading name 'Bah-Tock'.
- 'Bah-Tock' will be Faure's only source of income.
The 'Bah-Tock' business:
- Is expected to make a loss throughout the first 12 months of trading.
- Is expected to be profitable from 1 July 2013 onwards.
Structure of the 'Bah-Tock' business:
- The business will be unincorporated.
- Faure and Ravel will both work full-time on the affairs of the business.
- Faure will either employ Ravel, and pay him a commercial salary, or the two of them will run the business as
a partnership.
Ravel:
- Is 47 years old.
- Inherited a significant portfolio of quoted shares on the death of his mother in February 2004.
- Has annual taxable income, after deduction of the personal allowance, of ￡35,000.
- This income consists of bank interest and dividends only.
Required:
(a) Explain why a year end of 30 June, as opposed to 31 March, is likely to delay the first tax year in which the
'Bah-Tock' business makes a taxable profit rather than an allowable loss.
(b) On the assumption that the 'Bah-Tock' business will have a 30 June year end, analyse the issues that Faure
and Ravel should be aware of from a tax point of view if:
(i) Faure employs Ravel;
(ii) Faure and Ravel are partners in the business and summarise your findings.
Notes in relation to part (b)
1 Your analysis should be based on the information provided and should be restricted to the situation
where the business is loss-making.
2 You should address the effect of the choice of business structure on:
- the size of the loss made by the business;
- the reliefs available to Faure and Ravel in respect of the initial losses;
- the income tax and national insurance contributions liabilities of Faure and Ravel for the tax
years 2012/13 and 2013/14.
You should assume that the tax rates and allowances of the tax year 2011/12 will continue to apply for the
foreseeable future.
【正确答案】Text references. The basis of assessment and national insurance for the self-employed are both dealt with in
Chapter 6. Losses are covered in Chapter 8. Partnerships are covered in Chapter 9.
Top tips. The notes at the end of the question contain vital information about how this question should be
approached. Make sure you follow them!
Easy marks. There were a lot of marks for basic knowledge from F6 level such as the basis of assessment and
national insurance contributions.
Examiner's comments. Part (a) concerned the choice of year end for the new business; it was answered poorly by
a majority of candidates but very well by the remainder.
The question was slightly unusual in that it required candidates to explain why something was true; namely that one
year end rather than another would be likely to delay the first tax year in which the business makes a taxable profit.
This required candidates to apply their technical knowledge to the facts of the question.
In order to answer this question, candidates needed to know the opening year rules for an unincorporated business.
However, they also had to reach the conclusion set out in the question. The problem here was that many candidates
did not pause and think about what they had been asked to do. Instead, they simply wrote about opening years in
relation to overlap profits, utilisation of losses or tax payment dates.
Candidates who did well either thought before they began writing, such that they submitted very concise answers
that neatly summarised the position, or explored the opening year rules for each of the year ends and reached the
required conclusion.
Part (b) required a comparison of employing someone with going into partnership with them. There were lots of
marks available, many of which were straightforward and, on the whole, this part was answered reasonably well.
However, many candidates could have done considerably better if they had recognised all of the help that was
provided to them in the question and had taken the time to consider whether or not they had addressed all of the
relevant points.
Candidates' first impression on reading this question may have been favourable in that the technical area was one
they were likely to be comfortable with (although the lack of numbers may have worried some). However, in order
to maximise their marks candidates needed to follow the instructions given in the notes to the question. Note 1
required candidates' answers to be restricted to losses; this was ignored by many candidates. Note 2 provided a
structure to what was otherwise an awkward open ended question; unfortunately, this suggested structure was also
ignored by many candidates.
Those candidates who ignored the notes lost marks for two reasons; they wasted time writing about matters that
did not score (principally the taxation of profits) and they failed to address all of the relevant issues (as listed in
note 2). For example, candidates wrote about how Class 4 national insurance contributions would be calculated
when they should have written that no such contributions would be due until the business was profitable.
Chapter 6. Losses are covered in Chapter 8. Partnerships are covered in Chapter 9.
Top tips. The notes at the end of the question contain vital information about how this question should be
approached. Make sure you follow them!
Easy marks. There were a lot of marks for basic knowledge from F6 level such as the basis of assessment and
national insurance contributions.
Examiner's comments. Part (a) concerned the choice of year end for the new business; it was answered poorly by
a majority of candidates but very well by the remainder.
The question was slightly unusual in that it required candidates to explain why something was true; namely that one
year end rather than another would be likely to delay the first tax year in which the business makes a taxable profit.
This required candidates to apply their technical knowledge to the facts of the question.
In order to answer this question, candidates needed to know the opening year rules for an unincorporated business.
However, they also had to reach the conclusion set out in the question. The problem here was that many candidates
did not pause and think about what they had been asked to do. Instead, they simply wrote about opening years in
relation to overlap profits, utilisation of losses or tax payment dates.
Candidates who did well either thought before they began writing, such that they submitted very concise answers
that neatly summarised the position, or explored the opening year rules for each of the year ends and reached the
required conclusion.
Part (b) required a comparison of employing someone with going into partnership with them. There were lots of
marks available, many of which were straightforward and, on the whole, this part was answered reasonably well.
However, many candidates could have done considerably better if they had recognised all of the help that was
provided to them in the question and had taken the time to consider whether or not they had addressed all of the
relevant points.
Candidates' first impression on reading this question may have been favourable in that the technical area was one
they were likely to be comfortable with (although the lack of numbers may have worried some). However, in order
to maximise their marks candidates needed to follow the instructions given in the notes to the question. Note 1
required candidates' answers to be restricted to losses; this was ignored by many candidates. Note 2 provided a
structure to what was otherwise an awkward open ended question; unfortunately, this suggested structure was also
ignored by many candidates.
Those candidates who ignored the notes lost marks for two reasons; they wasted time writing about matters that
did not score (principally the taxation of profits) and they failed to address all of the relevant issues (as listed in
note 2). For example, candidates wrote about how Class 4 national insurance contributions would be calculated
when they should have written that no such contributions would be due until the business was profitable.
【答案解析】