) Explain the possible reasons why Jane Longwani was advised to register for VAT when she commenced to trade on 1 July 2018. [6 Marks]

(ii) Calculate the VAT paid by Jane for each of the tax years 2018 and 2019. You MUST clearly show the amounts of output tax and the recoverable input tax for each supply for each of the two tax years. Monthly figures of VAT are NOT REQUIRED.

[18 Marks]

(iii) Calculate the capital allowances for each of the tax years 2018 and 2019. [10 Marks]

(iv) Calculate the final taxable business profit for each of the tax years 2018 and 2019.

[8 Marks]

(v) Assuming that the income tax rates and bands for the tax year 2019 apply to the tax year 2018 as well, calculate the income tax paid by Jane for each of the tax years 2018 and 2019. [6 Marks]

(vi) Explain how the VAT and income tax you have calculated above should have been properly paid, stating the relevant due dates and the amounts payable on each due date. [8 Marks]

(b) Client 2

(i) Assuming that the income tax rates for the tax year 2019 apply to the tax year 2018 as well, calculate the amount of provisional income tax paid by Patrick for the tax year 2018 and the balance of income tax for the tax year 2018. [4 Marks]

(ii) Calculate the amount of provisional income tax payable by Patrick for the tax year 2019 and prepare a schedule showing the due dates and the amount payable on each due date. [6 Marks]

(iii) Advise Patrick of the amounts of penalties and interest on overdue taxes on all payments made up to and including 18 September 2019. [12 Marks]

(iv) Advise Patrick of the amounts of penalties chargeable on tax returns submitted late. [2 marks]

(v) State the possible reasons why the Commissioner General has subjected Patrick’s self-assessment income tax return for the tax year 2018 to a compliance check. [6 marks]

(vi) Explain the initial alternative courses of action that are open to Patrick following receipt of the notice of assessment showing additional income tax payable for the tax year 2018 of K17,100. [6 Marks]

(vii) Advise Patrick of the interest on overdue tax and penalties that he may be liable for as a result of the Commissioner General’s compliance check into his self- assessment income tax return for the tax year 2018 and state a possible reason why these penalties and interest may apply. [8 Marks]

[TOTAL: 100 MARKS]

END OF ASSIGNMENT QUESTION PAPER



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