ExpertEasy2 marksMultiple Choice
ACCA · Question 02 · The UK tax system and its administration
Marcus, a freelance graphic designer, had an income tax and Class 4 NIC liability of £6,000 for the tax year 2022/23. His total liability for 2023/24 is £7,500. Assuming he made the required payments on account on time, what is the balancing payment due on 31 January 2025 for the 2023/24 tax year?
Marcus, a freelance graphic designer, had an income tax and Class 4 NIC liability of £6,000 for the tax year 2022/23. His total liability for 2023/24 is £7,500. Assuming he made the required payments on account on time, what is the balancing payment due on 31 January 2025 for the 2023/24 tax year?
Answer options:
A.
£1,500
B.
£7,500
C.
£3,750
D.
£4,500
How to approach this question
Calculate the payments on account made (50% of previous year's liability each). Subtract the total payments on account from the current year's liability to find the balancing payment.
Full Answer
A.£1,500✓ Correct
Payments on account are based on the previous year's liability. Marcus would pay £3,000 on 31 Jan 2024 and £3,000 on 31 July 2024 (total £6,000). His actual liability for 23/24 is £7,500. The balancing payment due on 31 Jan 2025 is £7,500 - £6,000 = £1,500.
Common mistakes
Confusing the balancing payment for 23/24 with the first payment on account for 24/25.
Practice the full ACCA TX — Taxation Practice Exam 6
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