Tx notes fa22 Final

June 2023 to March 2024 exams
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35. Groups 
(a)
Companies can form a VAT group if they are under common control and have a place of 
business in the UK.
The advantages and disadvantages of companies forming a VAT group are as follows:
The advantages of group VAT registration are:
 
‣
No VAT is accounted for on transactions between members of the VAT group
‣
Only one VAT return is submitted for the group, by the representative member, therefore 
an administrative advantage.
‣
The group can choose which companies to include or exclude. A cash flow advantage 
would be achieved by leaving out of the group VAT registration a company which makes 
zero rated supplies and is therefore submitting monthly VAT returns to get monthly 
repayments of VAT from HMRC. 
The disadvantages of group VAT registration are:
 
‣
The limits for cash and annual accounting will apply to the group as a whole and not on 
an individual company basis.
‣
Joint and several liability of each company in the VAT group for VAT debts, not just the 
representative member who submits the VAT return.
‣
Possible administration issues collecting information to be passed on to the 
representative member.

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June 2023 to March 2024 exams
Watch free ACCA TX lectures
36. Jim 
Payments on Account for 2022/23 will be based on the income tax payable by self assessment in 
2021/22 (If Jim was self employed then any Class 4 NIC for 2021/22 would also be included in 
computing payments on account:
Due Dates: 
31 Jan 2023
5,100/2 = 2,550
31 Jul 2023
5,100/2 = 2,550
31 Jan 2024
Balancing payment
Plus first POA 31 Jan 2024
£7,629/2
= £3,814
Total due
31 Jan 2024
£7,343
37. Enquiries 
(a)
HM Revenue and Customs (HMRC) must normally give written notice within 12 months of the 
actual filing date.
(b)
HM Revenue and Customs can extend the above deadline by making a discovery assessment 
to prevent loss of tax. This may be done if the HMRC make a discovery which they could not 
reasonably have been expected to make from the information provided in the return. This 
assessment can be made up to 4 years from the end of the tax year, 6 years if the taxpayer has 
been careless and up to 20 years if the error is deliberate.
(c)
An enquiry is normally commenced due to:
‣
Under-declaration of income.
‣
Overstatement of deductions.
‣
Selection for a random review.
(d)
The taxpayer can either:
‣
Accept the HMRC’s amendment to the return; or
‣
Request a review of the decision by a HMRC officer and/or 
‣
Appeal to a tribunal within 30 days of notification of any additional tax due to the enquiry.
Income tax payable by self assessment
7,629
Less Payments on Accounts
(5,100)
2,529
Plus CGT Liability
1,000
Balancing payment
3,529

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