AAT TPFB cheat sheet

Registration threshold (2024/25): a business must register when taxable turnover exceeds £90,000 in any rolling 12-month period; the deregistration threshold is £88,000.

Backward look timing: notify HMRC within 30 days of the end of the month in which the threshold was exceeded; registration takes effect from the first day of the second month after that.

Forward look test: if taxable supplies are expected to exceed £90,000 within the next 30 days, notify before the end of that 30-day period; registration is effective from the date the threshold is expected to be exceeded.

Rates and categories: standard 20%; reduced 5% (for example domestic fuel and power, children's car seats, certain residential conversions); zero 0% (most food, books, children's clothing, passenger transport); exempt (insurance, finance, education, health, land); plus outside the scope of VAT.

Zero-rated versus exempt: a zero-rated supply is taxable, counts towards the registration threshold and allows input tax recovery; an exempt supply is not taxable, does not count towards the threshold and normally blocks related input tax recovery.

Tax point rules: the basic tax point is the date goods are delivered or services completed; an earlier invoice date or payment date becomes the actual tax point, and an invoice issued within 14 days after the basic tax point sets the tax point at the invoice date.

Full VAT invoice minimum content: supplier name, address and VAT registration number; unique invoice number; date of issue; customer name and address; description, quantity and unit price excluding VAT; VAT rate; VAT amount; total excluding and including VAT.

Simplified VAT invoices are allowed for retail supplies of £250 or less including VAT and must show the supplier's name, address and VAT number, the invoice date, a description of the supply and the VAT charged.

Record keeping: the VAT account (output tax and input tax) and supporting invoices, credit notes and records must normally be kept for six years.

Return boxes: 1 = VAT due on sales; 2 = VAT due on acquisitions/reverse charge; 3 = total VAT due (1 + 2); 4 = VAT reclaimed on purchases; 5 = net VAT (3 minus 4); 6 = total sales excluding VAT; 7 = total purchases excluding VAT; 8 and 9 = EU goods supplied and acquired.

Box 5 sign rule: a positive figure is payable to HMRC; a negative figure is repayable by HMRC.

Deadlines: an electronic return and payment are due one month and seven days after the end of the VAT period; paper returns are due within two months of the period end.

Cash accounting scheme: available where VAT-exclusive turnover is £1.35 million or less; output tax is accounted for when customers pay and input tax when suppliers are paid.

Flat rate scheme: available where VAT-exclusive turnover is £150,000 or less; VAT is calculated as a fixed percentage of gross turnover and input tax is generally not recoverable, except on capital assets of £2,000 or more.

Limited cost trader rule: a flat rate scheme business spending less than 2% of turnover (or less than £1,000 a year) on goods must use the 16.5% rate.

Annual accounting scheme: available where VAT-exclusive turnover is £1.35 million or less; one return is filed each year with nine interim payments on account.

Late submission penalties are points-based: one point per late return, with a £200 penalty once the threshold is reached (four points for quarterly filers).

Late payment penalties rise over time (applied at 15 days, 30 days and 31 days) and are charged alongside daily interest on the amount outstanding.

Personal allowance 2024/25 is £12,570; it is reduced by £1 for every £2 of income above £100,000 and falls to nil at £125,140.

Income tax bands in the UK (2024/25, excluding Scotland): basic rate 20% on the first £37,700 of taxable income, higher rate 40% up to £125,140, additional rate 45% above that.

Class 1 primary (employee) NIC 2024/25: 8% on earnings between the primary threshold of £242 a week and the upper earnings limit of £967 a week, then 2% above the UEL; no NIC below the primary threshold.

Class 1 secondary (employer) NIC 2024/25: 13.8% on earnings above the secondary threshold of £175 a week, reduced by any Employment Allowance (up to £5,000) claimed.

Tax codes: 1257L is the standard cumulative code for 2024/25; the L suffix indicates the standard personal allowance with no other adjustments; BR and D0 apply flat 20% and 40%; NT means no tax.

Statutory Sick Pay 2024/25: £116.75 a week for up to 28 weeks, paid after three qualifying (unpaid) waiting days, and only to employees earning at least the lower earnings limit of £123 a week.

Statutory Maternity Pay: 39 weeks in total, the first six weeks at 90% of average weekly earnings and the remaining 33 weeks at £184.03 a week or 90% of earnings if lower (2024/25); the same flat rate applies to paternity, shared parental and bereavement pay.

Student loan deductions 2024/25 start once earnings exceed the plan threshold: Plan 1 £24,990, Plan 2 £27,295, Plan 4 £31,395 and postgraduate loans £21,000.

Employees are paid through PAYE on a cumulative basis unless a week 1/month 1 code is operated; a new employee with no P45 is assessed using the starter checklist.

Full Payment Submission (FPS) must be sent on or before each payday and reports gross pay, PAYE tax, NIC, statutory payments and deductions for every employee paid.

Employer Payment Summary (EPS) is due by the 19th of the following month and is used to claim statutory payment recoveries and Employment Allowance, and to report a nil payment.

PAYE, NIC and student loan payments reach HMRC by the 22nd of the following month when paid electronically, or by the 19th when paid by post.

Employers with an average monthly PAYE liability below £1,500 may pay quarterly instead of monthly.

Payroll records must be kept for three years after the end of the tax year to which they relate.

P60: issued to every employee employed on 5 April, summarising pay and deductions for the year, by 31 May following the end of the tax year.

P45: given to an employee when they leave, showing pay and tax to date for that employment; the employee passes parts 1A to 3 to the next employer and keeps part 1.

Automatic enrolment: the minimum total contribution is 8% of qualifying earnings between £6,240 and £50,270, of which at least 3% must be paid by the employer; the earnings trigger is £10,000.

National Minimum Wage 2024/25: £11.44 an hour for workers aged 21 and over, £8.60 for 18 to 20, and £6.40 for 16 to 17 and apprentices.

Registration threshold (2024/25) is £90,000 of taxable turnover in any rolling 12 months; the deregistration threshold is £88,000.

Backward look: notify HMRC within 30 days of the end of the month the threshold was exceeded; registration is effective from the first day of the second month after.

Forward look: if taxable supplies will exceed £90,000 in the next 30 days, register before the end of that period, effective from the date of exceedance.

Liability categories and rates: standard 20%, reduced 5%, zero 0%, exempt, and outside the scope of VAT.

Zero-rated supplies are taxable and allow input tax recovery and count towards the threshold; exempt supplies do not count towards the threshold and usually block input tax recovery.

Tax point: the basic tax point is the date of delivery or completion; an earlier invoice or payment date becomes the actual tax point, and an invoice raised within 14 days of the basic tax point fixes the tax point at the invoice date.

A full VAT invoice must show supplier name, address and VAT number, a unique invoice number, date of issue, customer details, description, quantity, unit price excluding VAT, VAT rate, VAT amount and totals.

A simplified VAT invoice may be used for retail supplies of £250 or less including VAT, showing the supplier's name, address, VAT number, date, description and VAT charged.

The VAT account and supporting business records must normally be retained for six years.

Box 1 output tax plus box 2 reverse-charge/acquisition tax equals box 3 total tax due; box 5 is box 3 minus box 4 input tax.

Box 5 positive means payment to HMRC; negative means a repayment is due.

Electronic VAT returns and payments are due one month and seven days after the period end; paper returns are due within two months.

Cash accounting (turnover up to £1.35 million) accounts for VAT on the date cash is received or paid rather than on invoices.

Flat rate scheme (turnover up to £150,000 excluding VAT) applies a fixed percentage to gross turnover and generally blocks input tax recovery; limited cost traders use 16.5%.

Annual accounting (turnover up to £1.35 million) requires one annual return and nine interim payments on account.

Late submission penalties are points-based: one point per late return, with a £200 penalty once the threshold (four points for quarterly filers) is reached.

Late payment penalties apply at 15, 30 and 31 days after the due date, plus interest on the outstanding amount.

VAT errors are corrected on the next return if below the £10,000 disclosure limit (or 1% of turnover up to £50,000); larger errors require separate notification to HMRC.

Personal allowance 2024/25 is £12,570, tapered by £1 for every £2 of income above £100,000, reaching nil at £125,140.

Main UK income tax rates: 20% basic rate on taxable income up to £37,700, 40% higher rate to £125,140, 45% additional rate above.

Class 1 primary NIC: 8% on weekly earnings between £242 and £967, and 2% on earnings above £967 (2024/25).

Class 1 secondary NIC: 13.8% on weekly earnings above £175, offset by Employment Allowance of up to £5,000.

Tax code 1257L is the standard cumulative code; L means the standard allowance, BR and D0 apply flat rates and NT means no tax.

Statutory Sick Pay 2024/25 is £116.75 a week for up to 28 weeks after three unpaid waiting days, subject to the £123 weekly lower earnings limit.

Statutory Maternity Pay runs 39 weeks: 90% of average weekly earnings for six weeks, then £184.03 a week or 90% if lower (2024/25).

Student loan deductions apply above £24,990 (Plan 1), £27,295 (Plan 2), £31,395 (Plan 4) and £21,000 (postgraduate) for 2024/25.

A new employee without a P45 is taxed using the starter checklist; a week 1/month 1 code is used where cumulative treatment is not appropriate.

The FPS must reach HMRC on or before each payday and reports gross pay, PAYE, NIC, statutory payments and deductions.

The EPS is due by the 19th of the following month for statutory recoveries, Employment Allowance claims and nil payments.

PAYE payments are due by the 22nd of the following month (electronic payment) or the 19th (post).

Employers with average monthly liabilities under £1,500 may pay quarterly.

Payroll records must be kept for three years after the end of the relevant tax year.

P60 must be issued to employees employed on 5 April by 31 May; P11D benefits reports are due by 6 July.

A P45 is issued when an employee leaves, showing pay and tax to date; parts 1A to 3 go to the next employer and part 1 is kept by the employee.

Automatic enrolment minimum contributions are 8% of qualifying earnings (£6,240 to £50,270), with at least 3% from the employer; the earnings trigger is £10,000.

National Minimum Wage 2024/25: £11.44 for ages 21 and over, £8.60 for 18 to 20, and £6.40 for 16 to 17 and apprentices.