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ACCA · Applied Skills

TX: UK tax system and administration

15 free practice questions on uK tax system and administration, Section A of the ACCA Taxation: UK (TX) question bank. Topics include Payments on account, Compliance checks, Corporation tax, Self-assessment, Late filing penalties, Tax avoidance vs evasion. Each question carries its syllabus reference and a worked explanation. Practise them in the quiz with instant feedback, or read every question with its answer further down this page.

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Question 1

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All 15 uK tax system and administration questions

The same questions the quiz above draws on, in syllabus order, each with its answer and worked explanation. All 15 are multiple choice.

Question 1 · Syllabus ref A4b · Payments on account — due dates

Clara is a self-employed graphic designer. Her income tax liability for the tax year 2024-25 was £14,800, of which £3,400 was deducted at source under PAYE from a part-time employment. On what date is Clara's first payment on account for the tax year 2025-26 due?

  1. 31 January 2026
  2. 31 July 2026
  3. 31 January 2027
  4. 31 July 2027
Show answer and explanation

Answer: A. The first payment on account for 2025-26 falls on 31 January 2026 — within the tax year itself. The second falls on 31 July 2026. Each payment = (£14,800 − £3,400) × 50% = £5,700. Capital gains tax is never included in payments on account calculations. Option B is the second payment on account. Options C and D relate to 2026-27.

Question 2 · Syllabus ref A4b · Payments on account — calculation

Marcus is self-employed. For the tax year 2024-25, his income tax liability was £22,600 and his Class 4 NIC liability was £3,100. No tax was deducted at source. What is the amount of each payment on account for the tax year 2025-26?

  1. £11,300
  2. £12,850
  3. £25,700
  4. £13,350
Show answer and explanation

Answer: A. Payments on account are based on income tax only — Class 4 NIC is excluded. Each payment = £22,600 × 50% = £11,300. Option B (£12,850) incorrectly includes Class 4 NIC: (£22,600 + £3,100) × 50% = £12,850. Option C (£25,700) is the total of both payments combined. Option D is also incorrect. The correct answer is A: £11,300.

Question 3 · Syllabus ref A5a · Compliance checks — time limits

Priya submitted her self-assessment tax return for the tax year 2023-24 on time on 28 January 2025. HMRC suspects there may be a careless error in the return. By what date must HMRC open a compliance check into this return?

  1. 31 January 2026
  2. 5 April 2027
  3. 28 January 2026
  4. 5 April 2026
Show answer and explanation

Answer: C. Where a return is filed on time and HMRC suspects a careless error, HMRC must open a compliance check within 12 months of the actual filing date. Filed 28 January 2025, so deadline = 28 January 2026. Option A (31 January 2026) is close but wrong — the 12-month period runs from the actual filing date, not the statutory deadline. Option B (5 April 2027) applies to deliberate errors. Option D (5 April 2026) is not a relevant threshold. Correct answer is C: 28 January 2026.

Question 4 · Syllabus ref A4c · Corporation tax — quarterly instalments

Largo Ltd has augmented profits of £1,800,000 for the year ended 31 March 2026. In what months of the accounting period are Largo Ltd's corporation tax quarterly instalment payments due?

  1. Months 7, 10, 13 and 16
  2. Months 3, 6, 9 and 12
  3. Months 1, 4, 7 and 10
  4. Months 6, 9, 12 and 15
Show answer and explanation

Answer: A. Large companies (augmented profits over £1,500,000) pay corporation tax by quarterly instalments in months 7, 10, 13 and 16 of the accounting period. For a year ending 31 March 2026: month 7 = October 2025, month 10 = January 2026, month 13 = April 2026, month 16 = July 2026. Options B, C and D describe instalment patterns that do not apply to UK corporation tax.

Question 5 · Syllabus ref A3a · Self-assessment — filing deadlines

Oliver filed his 2024-25 self-assessment tax return online on 15 March 2026. What is the correct online filing deadline, and was his return filed on time?

  1. 31 January 2027 — filed on time
  2. 31 October 2025 — filed late
  3. 31 January 2026 — filed late
  4. 28 February 2026 — filed on time
Show answer and explanation

Answer: C. The online filing deadline for a 2024-25 self-assessment return is 31 January 2026. Oliver filed on 15 March 2026 — after this deadline, so his return was filed late. Option A gives the deadline for the 2025-26 tax year. Option B is the paper filing deadline (31 October). Option D is incorrect — there is no 28 February deadline in self-assessment.

Question 6 · Syllabus ref A6a · Late filing penalties

Fatima submitted her 2024-25 self-assessment return online on 20 April 2026, having missed the 31 January 2026 deadline. She also paid her tax on 20 April 2026. Which of the following correctly describes the consequences?

  1. £100 late filing penalty plus interest on the late tax payment
  2. £100 late filing penalty only
  3. Interest on the late tax payment only
  4. No penalty — the return was filed within 3 months of the deadline
Show answer and explanation

Answer: A. A fixed £100 penalty arises immediately when a self-assessment return is filed after 31 January, regardless of whether tax is owed. As Fatima filed within 3 months of the deadline, the £100 penalty applies but the additional daily penalties (which start 3 months after the deadline) do not. Interest also runs from 31 January 2026 on the unpaid tax. Option B ignores the interest charge. Option C ignores the fixed penalty. Option D is wrong — the £100 penalty applies from the first day of lateness.

Question 7 · Syllabus ref A2d · Tax avoidance vs evasion

Which of the following statements correctly distinguishes tax avoidance from tax evasion?

  1. Both tax avoidance and tax evasion are illegal
  2. Tax avoidance is illegal; tax evasion is legal but unethical
  3. Tax avoidance involves concealing income; tax evasion uses legitimate reliefs
  4. Tax avoidance is legal; tax evasion is illegal and involves deliberate misrepresentation
Show answer and explanation

Answer: D. Tax avoidance is the legal reduction of a tax liability by arranging affairs within the law. Tax evasion is illegal — it involves deliberate misrepresentation or concealment of facts, such as understating income or fabricating expenses. The GAAR targets abusive avoidance schemes. Options A and B incorrectly classify avoidance as illegal. Option C has the definitions reversed.

Question 8 · Syllabus ref A4d · Record retention — self-employed

Sven is a self-employed plumber. For how long must Sven retain his business records relating to the tax year 2024-25?

  1. Until 31 January 2027
  2. Until 31 January 2028
  3. Until 31 January 2031
  4. Until 5 April 2030
Show answer and explanation

Answer: C. Self-employed individuals must retain records for five years from the 31 January filing deadline following the tax year. For 2024-25, the filing deadline is 31 January 2026, so records must be kept until 31 January 2031. Option A (2027) is only one year after the filing deadline. Option B (2028) applies to employees, who retain records for one year from the filing deadline — not five. Option D (5 April 2030) is not a relevant date.

Question 9 · Syllabus ref A5b · Appeals — direct to Tribunal

In which of the following circumstances must an appeal be made directly to the First-tier Tribunal rather than first to HMRC?

  1. An individual appealing a VAT late registration penalty
  2. A company appealing a penalty for late filing of its corporation tax return
  3. An individual appealing an income tax assessment raised by HMRC
  4. A company appealing a penalty for late submission of PAYE returns
Show answer and explanation

Answer: A. Appeals relating to indirect taxes — including VAT penalties — must be made directly to the First-tier Tribunal. Direct tax appeals (income tax, corporation tax, PAYE) must first go to HMRC for an internal review before proceeding to the Tribunal. Option B relates to corporation tax (direct tax). Option C relates to income tax (direct tax). Option D relates to PAYE (direct tax). Only Option A involves an indirect tax, requiring direct Tribunal appeal.

Question 10 · Syllabus ref A4b · Balancing payment due date

When is the balancing payment for the tax year 2024-25 due under self-assessment?

  1. 5 April 2025
  2. 31 October 2025
  3. 31 January 2026
  4. 31 January 2025
Show answer and explanation

Answer: C. The balancing payment — settling the remaining income tax and CGT liability for a tax year — is due on 31 January following the end of the tax year. For 2024-25, this is 31 January 2026. Option A (5 April 2025) is the last day of the tax year itself. Option B (31 October 2025) is the paper return filing deadline. Option D (31 January 2025) is the balancing payment date for 2023-24, not 2024-25.

Question 11 · Syllabus ref A3b · Company CT return — filing deadline

Nexus Ltd has a 12-month accounting period ending 30 September 2025. When must Nexus Ltd file its corporation tax return?

  1. 31 January 2026
  2. 31 December 2025
  3. 30 September 2025
  4. 30 September 2026
Show answer and explanation

Answer: D. A company must file its corporation tax return within 12 months of the end of its accounting period. For the year ending 30 September 2025, the filing deadline is 30 September 2026. Option A (31 January 2026) and Option B (31 December 2025) reflect self-assessment deadlines for individuals — not the corporate 12-month rule. Option C is the end of the accounting period itself.

Question 12 · Syllabus ref A4a · Filing deadline — paper return

Beatrice received a notice to file a self-assessment return for the tax year 2024-25 on 1 June 2025. She wishes to file a paper return. What is the latest date by which she must submit it?

  1. 31 October 2025
  2. 31 January 2026
  3. 31 December 2025
  4. 5 April 2026
Show answer and explanation

Answer: A. The paper self-assessment return deadline is 31 October following the end of the tax year — so 31 October 2025 for 2024-25. If Beatrice misses this, she can still file online by 31 January 2026 (Option B), but that is the online deadline. Options C and D are not relevant filing deadlines for self-assessment.

Question 13 · Syllabus ref A2c · Role of HMRC

Which of the following best describes the role of HM Revenue & Customs (HMRC)?

  1. HMRC sets UK tax rates and allowances through primary legislation
  2. HMRC is an independent body with no accountability to the government
  3. HMRC is responsible for collecting and administering direct and indirect taxes in the UK
  4. HMRC only administers income tax and corporation tax
Show answer and explanation

Answer: C. HMRC is the UK government department responsible for collecting taxes, paying state support, and administering other regulatory regimes. It handles both direct taxes (income tax, corporation tax, CGT) and indirect taxes (VAT, excise duties). Option A is wrong — tax rates are set by Parliament through Finance Acts, not HMRC. Option B is wrong — HMRC is accountable to the Treasury. Option D is wrong — HMRC also administers VAT, NICs, customs duties and more.

Question 14 · Syllabus ref A1b · Direct vs indirect taxation

Which of the following is an example of an indirect tax?

  1. Income tax
  2. Corporation tax
  3. Capital gains tax
  4. Value added tax (VAT)
Show answer and explanation

Answer: D. VAT is an indirect tax — it is charged on supplies of goods and services, collected by businesses on behalf of HMRC, and the burden can be passed on to the final consumer. Income tax, capital gains tax, and corporation tax are all direct taxes — levied directly on the income or gains of individuals or companies and cannot be shifted to a third party.

Question 15 · Syllabus ref A6a · Error penalties — careless, unprompted

Kamil submitted a self-assessment return that understated his tax liability by £10,000 due to a careless error. He disclosed this to HMRC without being prompted. What is the maximum penalty and the minimum penalty applicable?

  1. Maximum 100%, minimum 30%
  2. Maximum 70%, minimum 20%
  3. Maximum 30%, minimum 15%
  4. Maximum 30%, minimum 0%
Show answer and explanation

Answer: D. For a careless error, the maximum penalty is 30% of the potential lost revenue. With an unprompted disclosure, the minimum is reduced to 0% — HMRC has discretion to charge nothing. Option A (100%/30%) applies to deliberate and concealed errors. Option B (70%/20%) applies to deliberate but not concealed errors. Option C gives the correct maximum (30%) but the wrong minimum — 15% applies to prompted disclosure, not unprompted. The correct answer is D: maximum 30%, minimum 0%.

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