From the past papers

In both cases and probably not surprisingly I have to agree with the ACCA answers! In the first example the allowable cost will be made up of the original cost less the insurance proceeds (which is where you stopped) but you must also add in the amount then spent in restoring the asset - hence 77,500. In the second example - clearly IHT is a capital tax so it's now either answer B or D, then NIC's are a tax on income - either employment or self employment - that is a revenue tax - a tax on income! You have confused that term with sales revenues which is what VAT is based on - this is not a tax on income received nor capital of the taxpayer, so it is neither.