AAT L4 Business & Personal Tax cheat sheet

Capital allowances: Annual Investment Allowance gives 100% relief on most plant and machinery up to the £1m limit; cars are excluded from AIA.

Main pool writing-down allowance is 18% reducing balance; special rate pool (integral features, long-life assets) is 6%.

New zero-emission cars attract 100% first-year allowance; other new cars go to main pool at 18%, second-hand cars to special rate pool at 6%.

Trading losses: carry back 12 months against total profits (extended to 3 years for terminal losses), carry forward against future trading profits, or set against current-year total profits.

R&D tax relief for SMEs: enhanced deduction of 86% above qualifying costs plus payable credit for loss-making companies; RDEC scheme for large companies.

Capital gains: business asset disposal relief taxes qualifying gains at 10% up to a £1m lifetime limit; otherwise 20% for higher-rate taxpayers.

Trading profit adjustment: add back disallowable expenses (entertaining, capital items, depreciation) and deduct capital allowances to reach tax-adjusted trading profit.

Bad debt relief for VAT applies to unpaid sales invoices written off; output tax is reclaimed on the VAT element only.

Income tax bands (rUK): personal allowance £12,570, basic rate 20% to £50,270, higher rate 40% to £125,140, additional rate 45% above.

Personal allowance tapers by £1 for every £2 of adjusted net income above £100,000, reaching zero at £125,140.

Savings: personal savings allowance £1,000 (basic), £500 (higher), £0 (additional); starting rate for savings 0% on first £5,000 when non-savings income is low.

Dividend allowance £500; dividend rates 8.75% basic, 33.75% higher, 39.35% additional, taxed as top slice of income.

Capital gains annual exempt amount £3,000; residential property gains reported and paid within 60 days of completion.

Pension annual allowance £60,000 with tapering for high earners; tax relief at marginal rate on contributions up to relevant earnings.

Marriage allowance transfers £1,260 of personal allowance, worth up to £252 tax saving for the recipient.

Gift aid extends basic-rate band by gross donation; higher-rate relief claimed via self assessment.

Self assessment filing deadline: 31 January following the end of the tax year for online returns; paper returns due 31 October.

Payments on account due 31 January and 31 July, each half of the previous year's net liability, where liability exceeds £1,000.

Late filing penalties: £100 fixed after 3 months, then £10/day up to £900, plus 5% of tax or £300 at 6 and 12 months.

Late payment penalties: 5% of unpaid tax at 30 days, 6 months and 12 months, plus daily interest at Bank of Base plus 2.5%.

VAT registration threshold £90,000 rolling 12-month turnover; deregistration threshold £88,000; returns usually quarterly with one month plus 7 days to pay.

Making Tax Digital for VAT requires digital records and compatible software for VAT-registered businesses.

Corporation tax return (CT600) due 12 months after accounting period end; tax payable 9 months and 1 day after period end for large companies quarterly.

Record retention: 6 years for VAT and income tax records (5 years after the 31 January deadline for self assessment).

HMRC enquiry window: 12 months after the filing deadline for a return submitted on time.

Sole trader and partnership profits are taxed on the individual partners via income tax and Class 2/4 NICs, not at entity level.

Partnership profit shares are agreed in the partnership agreement; absent agreement, profits are shared equally.

Class 4 NICs: 6% on profits between £12,570 and £50,270, then 2% above; Class 2 is a flat small profits threshold charge.

Limited company corporation tax: 19% small profits rate up to £50,000, 25% main rate above £250,000, marginal relief between.

Marginal relief fraction applies between £50,000 and £250,000, giving an effective rate rising from 19% to 25%.

Director/shareholder remuneration: salary is deductible for corporation tax and attracts NICs; dividends are not deductible but taxed at dividend rates.

Close company rules can apply benefit-in-kind and distribution treatment to loans to participators.

Associated companies divide the £50,000 and £250,000 corporation tax thresholds between them.