The Chartered Institute of Taxation
AWARENESS
November 2022
TIME ALLOWED – 3 HOURS 15 MINUTES
• All five Awareness Modules are contained in this document.
• You must only answer the modules you have already entered for, no other module answers will be marked. You
cannot change your mind on the day of the exam.
• Type your answers between the correct question dividers and against the correct question number. Questions are
numbered 1 – 60. Do NOT delete any of the question dividers.
• If you are answering Module A VAT including Stamp Taxes you may, where appropriate, answer by reference to
Stamp Duty Land Tax or Land and Buildings Transaction Tax.
• Each module consists of 12 questions and each question carries 5 marks. To pass the exam you need to obtain a
minimum of 21 marks (35%) out of the 60 available per module and achieve an overall pass mark of at least 50%.
• You should answer all the questions in each of the three modules.
• You should answer questions in brief bullet points and/or summary computations where appropriate.
• You should make all calculations to the nearest month and pound unless stated otherwise.
• Unless otherwise indicated by the provision of additional information in the question, you may assume that 2021/22 legislation
(including rates and allowances) continues to apply for 2022/23 and future years. Candidates answering by reference to more
recently enacted legislation or tax cases will not be penalised.
• You must type your answer in the space on the screen as indicated by the Exam4 guidance.
, Module A: VAT including Stamp Taxes
If you have entered for Module A you must answer Questions 1 – 12 and type your answers between the question
dividers 1 – 12.
1. Marcus started trading on 1 January 2022 and registered for VAT on 1 October 2022.
His main expense has been stock. Of the stock purchased since 1 January 2022, approximately 60% was on hand on
1 October 2022.
His other expenses include an invoice for one-off legal services relating to taking on employees. The invoice was
issued and paid in February 2022.
All items included VAT at the standard rate.
Explain if and how Marcus may recover input VAT incurred prior to 1 October 2022.
2. Caitlin is not VAT registered. She has traded for a number of years, making taxable supplies of approximately £6,500
per month.
Caitlin will make taxable supplies to a new customer, Sheila, of £20,000 on 18 November 2022, and a further £10,000
on 15 February 2023.
Explain whether Caitlin is required to charge VAT on the supplies to Sheila.
3. Trihs Ltd provides accountancy services.
On 28 August 2022, the company entered into a three-year contract with a supplier providing virtual desktop services
for a fixed amount each month. The first invoice, which related to services for the month ended 30 September 2022,
was raised on 4 October 2022. Trihs Ltd paid this on 28 September 2022.
On 2 October 2022, Trihs Ltd took delivery of a photocopier. It had received an invoice for the photocopier on
20 September 2022 and paid it on 25 September 2022.
Explain how the tax points are determined in respect of the above.
4. On 1 October 2022, Toob Ltd entered into a three-year agreement to lease a car. The car was made available to Kai,
an employee, for business and personal use.
Each month the company pays a leasing charge and a separate maintenance charge. Input VAT for October was
£120 in respect of the leasing charge and £30 for the maintenance charge.
Kai submitted a business mileage claim relating to a journey to a client’s premises on 20 October. The fuel element of
the claim, calculated using HMRC’s advisory fuel rates, was £60. In support of the claim, Kai provided a petrol receipt
for £70 dated 22 October.
Explain, with calculations, the amount of input VAT the company may recover for October in relation to the
car.
5. Sevracs Ltd has a VAT year-end of 30 September. On 15 July 2022, it purchased a freehold (Scots Law – ownership)
interest in a new warehouse for £800,000, plus VAT of £160,000. In the year to 30 September 2022, 70% of supplies
made by the company were taxable. It expects 60% of supplies to be taxable in the year to 30 September 2023.
Explain, with calculations, the VAT implications of the purchase of the new warehouse.
Page 2 of 16
,6. Terry, a hairdresser, uses the flat rate scheme.
For the quarter ended 31 October 2022, his turnover was £20,000.
His costs were £6,000 for rent, £920 for hair products and £700 for a new computer.
All amounts are inclusive of VAT.
Explain whether Terry is a limited cost trader for the quarter ended 31 October 2022.
7. Amira owns a commercial building which has been empty for some time.
On 1 August 2022, she opted to tax the building in order to recover input VAT on repairs.
In late October 2022, she entered into negotiations with a potential tenant, Clive. Clive makes wholly-exempt supplies.
Should the negotiations be successful, Clive will occupy the premises from 1 December 2022.
In light of the negotiations, Amira is considering revoking the option to tax.
Explain the implications for Amira of revoking the option to tax and the deadline, if any, for doing so.
8. Rudy makes both exempt and taxable supplies.
He has agreed to sell part of his business to Reppils Ltd. The sale will meet the conditions for transfer of a going
concern treatment. The assets to be sold are used by Rudy in making taxable supplies.
Rudy will incur professional fees including VAT at the standard rate in relation to the sale.
Explain the VAT treatment of the sale of part of the business and whether Rudy may recover input vat on the
professional fees.
9. Sevolg Ltd is the representative member of a VAT group comprising a large number of companies, including Tleb Ltd
and Esit Ltd, both of which are 100% owned by Sevolg Ltd.
Sevolg Ltd will undertake the following transactions in the next few weeks:
1) It will sell 60% of its shares in Tleb Ltd.
2) It will become a member of a partnership, entitled to 75% of the partnership’s income and capital.
3) It will acquire a 100% interest in Rups Inc, a company operating wholly in America.
In addition, the trade and assets of Esit Ltd will be sold and Esit Ltd will become dormant.
Explain the implications of the above transactions for the group registration.
10. Ladnas Ltd’s VAT return for the quarter ended 30 September 2022 showed outputs of £900,000 and VAT payable to
HMRC of £124,200.
The return included two errors: the first error had the effect of understating output VAT by £8,000, and the second of
understating input VAT by £500.
Explain, with calculations, the options available to Ladnas Ltd for correcting the errors.
Page 3 of 16
, 11. On 1 November 2022, Cherise transferred shares in Toac Ltd to Kate.
The shares had been valued at £180,000. Due to financial difficulties, Cherise accepted cash of £142,500 from Kate
and Kate agreed to release Cherise from a debt of £10,000.
Calculate the Stamp Duty payable on the sale of the shares and state who is responsible for paying it.
12. On 28 October 2022, Triks Ltd entered into a contract to buy a new commercial building for £220,000 plus VAT of
£44,000. The contract was completed on 4 November 2022, with Triks Ltd occupying the property from that date.
Calculate the Stamp Duty Land Tax payable by Triks Ltd and state the due date for payment.
Page 4 of 16
AWARENESS
November 2022
TIME ALLOWED – 3 HOURS 15 MINUTES
• All five Awareness Modules are contained in this document.
• You must only answer the modules you have already entered for, no other module answers will be marked. You
cannot change your mind on the day of the exam.
• Type your answers between the correct question dividers and against the correct question number. Questions are
numbered 1 – 60. Do NOT delete any of the question dividers.
• If you are answering Module A VAT including Stamp Taxes you may, where appropriate, answer by reference to
Stamp Duty Land Tax or Land and Buildings Transaction Tax.
• Each module consists of 12 questions and each question carries 5 marks. To pass the exam you need to obtain a
minimum of 21 marks (35%) out of the 60 available per module and achieve an overall pass mark of at least 50%.
• You should answer all the questions in each of the three modules.
• You should answer questions in brief bullet points and/or summary computations where appropriate.
• You should make all calculations to the nearest month and pound unless stated otherwise.
• Unless otherwise indicated by the provision of additional information in the question, you may assume that 2021/22 legislation
(including rates and allowances) continues to apply for 2022/23 and future years. Candidates answering by reference to more
recently enacted legislation or tax cases will not be penalised.
• You must type your answer in the space on the screen as indicated by the Exam4 guidance.
, Module A: VAT including Stamp Taxes
If you have entered for Module A you must answer Questions 1 – 12 and type your answers between the question
dividers 1 – 12.
1. Marcus started trading on 1 January 2022 and registered for VAT on 1 October 2022.
His main expense has been stock. Of the stock purchased since 1 January 2022, approximately 60% was on hand on
1 October 2022.
His other expenses include an invoice for one-off legal services relating to taking on employees. The invoice was
issued and paid in February 2022.
All items included VAT at the standard rate.
Explain if and how Marcus may recover input VAT incurred prior to 1 October 2022.
2. Caitlin is not VAT registered. She has traded for a number of years, making taxable supplies of approximately £6,500
per month.
Caitlin will make taxable supplies to a new customer, Sheila, of £20,000 on 18 November 2022, and a further £10,000
on 15 February 2023.
Explain whether Caitlin is required to charge VAT on the supplies to Sheila.
3. Trihs Ltd provides accountancy services.
On 28 August 2022, the company entered into a three-year contract with a supplier providing virtual desktop services
for a fixed amount each month. The first invoice, which related to services for the month ended 30 September 2022,
was raised on 4 October 2022. Trihs Ltd paid this on 28 September 2022.
On 2 October 2022, Trihs Ltd took delivery of a photocopier. It had received an invoice for the photocopier on
20 September 2022 and paid it on 25 September 2022.
Explain how the tax points are determined in respect of the above.
4. On 1 October 2022, Toob Ltd entered into a three-year agreement to lease a car. The car was made available to Kai,
an employee, for business and personal use.
Each month the company pays a leasing charge and a separate maintenance charge. Input VAT for October was
£120 in respect of the leasing charge and £30 for the maintenance charge.
Kai submitted a business mileage claim relating to a journey to a client’s premises on 20 October. The fuel element of
the claim, calculated using HMRC’s advisory fuel rates, was £60. In support of the claim, Kai provided a petrol receipt
for £70 dated 22 October.
Explain, with calculations, the amount of input VAT the company may recover for October in relation to the
car.
5. Sevracs Ltd has a VAT year-end of 30 September. On 15 July 2022, it purchased a freehold (Scots Law – ownership)
interest in a new warehouse for £800,000, plus VAT of £160,000. In the year to 30 September 2022, 70% of supplies
made by the company were taxable. It expects 60% of supplies to be taxable in the year to 30 September 2023.
Explain, with calculations, the VAT implications of the purchase of the new warehouse.
Page 2 of 16
,6. Terry, a hairdresser, uses the flat rate scheme.
For the quarter ended 31 October 2022, his turnover was £20,000.
His costs were £6,000 for rent, £920 for hair products and £700 for a new computer.
All amounts are inclusive of VAT.
Explain whether Terry is a limited cost trader for the quarter ended 31 October 2022.
7. Amira owns a commercial building which has been empty for some time.
On 1 August 2022, she opted to tax the building in order to recover input VAT on repairs.
In late October 2022, she entered into negotiations with a potential tenant, Clive. Clive makes wholly-exempt supplies.
Should the negotiations be successful, Clive will occupy the premises from 1 December 2022.
In light of the negotiations, Amira is considering revoking the option to tax.
Explain the implications for Amira of revoking the option to tax and the deadline, if any, for doing so.
8. Rudy makes both exempt and taxable supplies.
He has agreed to sell part of his business to Reppils Ltd. The sale will meet the conditions for transfer of a going
concern treatment. The assets to be sold are used by Rudy in making taxable supplies.
Rudy will incur professional fees including VAT at the standard rate in relation to the sale.
Explain the VAT treatment of the sale of part of the business and whether Rudy may recover input vat on the
professional fees.
9. Sevolg Ltd is the representative member of a VAT group comprising a large number of companies, including Tleb Ltd
and Esit Ltd, both of which are 100% owned by Sevolg Ltd.
Sevolg Ltd will undertake the following transactions in the next few weeks:
1) It will sell 60% of its shares in Tleb Ltd.
2) It will become a member of a partnership, entitled to 75% of the partnership’s income and capital.
3) It will acquire a 100% interest in Rups Inc, a company operating wholly in America.
In addition, the trade and assets of Esit Ltd will be sold and Esit Ltd will become dormant.
Explain the implications of the above transactions for the group registration.
10. Ladnas Ltd’s VAT return for the quarter ended 30 September 2022 showed outputs of £900,000 and VAT payable to
HMRC of £124,200.
The return included two errors: the first error had the effect of understating output VAT by £8,000, and the second of
understating input VAT by £500.
Explain, with calculations, the options available to Ladnas Ltd for correcting the errors.
Page 3 of 16
, 11. On 1 November 2022, Cherise transferred shares in Toac Ltd to Kate.
The shares had been valued at £180,000. Due to financial difficulties, Cherise accepted cash of £142,500 from Kate
and Kate agreed to release Cherise from a debt of £10,000.
Calculate the Stamp Duty payable on the sale of the shares and state who is responsible for paying it.
12. On 28 October 2022, Triks Ltd entered into a contract to buy a new commercial building for £220,000 plus VAT of
£44,000. The contract was completed on 4 November 2022, with Triks Ltd occupying the property from that date.
Calculate the Stamp Duty Land Tax payable by Triks Ltd and state the due date for payment.
Page 4 of 16
