[Damilola]

I wrote the UK variant. Q1 was not too bad actually. On the expansion of the business, there would be increased NIC and additional income tax on the extra tax adjusted profit (noting that personal allowance is no longer allowed) compared to £85000 of both business strategies. There would also be VAT tax payable for the two different strategies considering only 76% of the input VAT is recoverable. Strategy A had a higher profit. But strategy B had a better post tax income.

I could not answer the CFC part, lost marks there.

Also the unused personal allowance for the last three years should be considered in calculating the maximum allowance without incurring a tax charge.

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