Test Your Tax Knowledge With This Quiz

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| By Catherine Halcomb
Catherine Halcomb
Community Contributor
Quizzes Created: 1443 | Total Attempts: 6,686,485
| Attempts: 295
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  • 1/10 Questions

    Which among the following is a Progressive Tax?

    • Income-tax
    • Sales tax
    • Customs Duty
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About This Quiz

How much do you know about taxes and their facts? Test your knowledge regarding tax regulations with this quiz and see for yourself. Taxes are mandatory contributions that are imposed on individuals or businesses by a government. Taxes are of two types, direct and indirect taxes. The quiz consists of questions mainly related to VAT. If you want to check how much do you know about taxes, play it now and evaluate. Best of luck, buddy!

Test Your Tax Knowledge With This Quiz - Quiz

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  • 2. 

    The standard rate of VAT in the UK is 20%?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The current 20% rate of VAT was implemented on 4th January 2011.

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  • 3. 

    Tax is boring.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Tax can be very interesting with many subtle nuances - and for those days when it's getting a little mundane, there's always Jaffa Cakes.

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  • 4. 

    Does VAT apply to e-books in UK?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    VAT does apply to e-books in the UK. As of 1st May 2020, e-books and digital publications are subject to a reduced VAT rate of 0% in the UK. This means that no VAT is charged on the sale of e-books. Therefore, the given answer "False" is incorrect.

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  • 5. 

    Anchor doesn't recover VAT on most of its purchases - why?

    • It doesn't pay VAT on most of its purchases

    • It's a charity

    • Most of its sales are not VATable

    • The tax team don't submit VAT returns on time

    Correct Answer
    A. Most of its sales are not VATable
    Explanation
    The reason Anchor doesn't recover VAT on most of its purchases is because most of its sales are not VATable. This means that the products or services it sells are exempt from VAT, so there is no VAT to recover on the purchases it makes.

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  • 6. 

    VAT is not payable on good purchased from outside the UK?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Suppliers registered outside the UK will not included VAT on their invoices (if it is included, we would not pay it to them), however in our VAT return we must account for the purchase and pay the VAT to HMRC under the reverse charge process.
    There is also a domestic reverse charge for certain items e.g. bulk mobile phone purchases.

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  • 7. 

    Anchor doesn't pay Corporation Tax because it's a charity?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Charities still need to complete a Corporation Tax return and can, like Anchor, have non-charitable income that could be taxed.
    Anchor has not paid Corporation Tax in recent years due to other allowable losses / expenses used against the non-charitable income.

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  • 8. 

    A company is a VAT taxable person

    • Because it independently and usually carries out an economic activity

    • Because it’s a legal person

    • Because it's a company.

    • Because it should give taxes

    Correct Answer
    A. Because it’s a legal person
    Explanation
    The correct answer is because it's a legal person. This is because being a legal person is a requirement for a company to be considered a VAT taxable person. Being a legal person means that the company has a legal identity separate from its owners or shareholders, allowing it to enter into contracts, own property, and be held liable for its actions. This legal status is necessary for the company to fulfill its tax obligations, including paying VAT taxes.

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  • 9. 

    What is the largest source of government revenues?

    • Corporate taxes

    • VAT

    • Individual income tax

    • Option 4

    Correct Answer
    A. Individual income tax
    Explanation
    Individual income tax is the largest source of government revenues because it is a tax imposed on the income of individuals, including wages, salaries, and other earnings. This tax is collected by the government and used to fund various public services and programs. It is typically one of the main sources of revenue for governments around the world, as it is levied on a large portion of the population. Corporate taxes and VAT (Value Added Tax) are also significant sources of government revenues, but individual income tax tends to contribute the most to the government's income.

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  • 10. 

    Chocolate-chip cookies are a "luxury" item and therefore attract the standard rate of VAT.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    On the biscuit front, only chocolate coated biscuits are classed as luxuries. Chocolate coated cakes are still "essentials".
    Chocolate chip cookies are viewed as "essentials" by HMRC and are charged VAT at 0%.Sweets are obviously luxuries so are all standard rated.

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Quiz Review Timeline (Updated): Mar 30, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 30, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 08, 2022
    Quiz Created by
    Catherine Halcomb
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