TX Exam Kit FA23.pdf

ACCA Applied Skills Taxation (TX‐UK) (Finance Act 2023) EXAM KIT For June 2024 to March 2025 examination sittings T X– U K: TAXA TION ( FA2023 ) British Library Cataloguing‐in‐Publication Data A catalogue record for this book is available from the British Library. Published by: Kaplan Publishin...

ACCA Applied Skills Taxation (TX‐UK) (Finance Act 2023) EXAM KIT For June 2024 to March 2025 examination sittings T X– U K: TAXA TION ( FA2023 ) British Library Cataloguing‐in‐Publication Data A catalogue record for this book is available from the British Library. Published by: Kaplan Publishing UK Unit 2 The Business Centre Molly Millar’s Lane Wokingham Berkshire RG41 2QZ ISBN: 978‐1‐83996‐392‐6 © Kaplan Financial Limited, 2023 Printed and bound in Great Britain The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials. All rights reserved. No part of this examination may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without prior permission from Kaplan Publishing. Acknowledgements The past ACCA examination questions are the copyright of the Association of Chartered Certified Accountants. The original answers to the questions from June 1994 onwards were produced by the examiners themselves and have been adapted by Kaplan Publishing. P.2 KA PLAN PUBLISHING CONTENTS Page Index to questions and answers P.5 Analysis of past exams P.15 Exam technique P.19 Exam specific information P.23 Kaplan’s recommended revision approach P.27 Kaplan’s TX examination revision plan P.29 Tax rates and allowances P.37 Time limits and election dates P.43 Section 1 Practice income tax and national insurance questions 1 2 Practice chargeable gains questions 79 3 Practice inheritance tax questions 113 4 Practice corporation tax questions 135 5 Practice value added tax questions 189 6 Answers to practice income tax and national insurance questions 217 7 Answers to practice chargeable gains questions 405 8 Answers to practice inheritance tax questions 475 9 Answers to practice corporation tax questions 517 10 Answers to practice value added tax questions 625 11 Specimen exam questions 663 12 Answers to specimen exam questions 679 KA PLAN PUBLISHING P.3 T X– U K: TAXA TION ( FA2023 ) Key features in this edition In addition to providing a wide ranging bank of real past exam questions, we have also included in this edition:  An analysis of all of the recent examinations.  Exam specific information and advice on exam technique.  Our recommended approach to make your revision for this particular subject as effective as possible. This includes step by step guidance on how best to use our Kaplan material (study text, pocket notes and exam kit) at this stage in your studies.  A wealth of past real examination questions adapted to the new examination style with enhanced tutorial answers and packed with specific key answer tips, technical tutorial notes and exam technique tips from our experienced tutors.  Complementary online resources including full tutor debriefs and question assistance to point you in the right direction when you get stuck. You will find a wealth of other resources to help you with your studies on the following sites: www.mykaplan.co.uk www.accaglobal.com/en/student.html Quality and accuracy are of the utmost importance to us so if you spot an error in any of our products, please send an email to [email protected] with full details, or follow the link to the feedback form in MyKaplan. Our Quality Coordinator will work with our technical team to verify the error and take action to ensure it is corrected in future editions. P.4 KA PLAN PUBLISHING INDEX TO QUESTIONS AND ANSWERS INTRODUCTION All TX exams have been computer‐based exams (CBEs) from the June 2019 sitting, if you would like further information on sitting a CBE TX examination please contact either Kaplan or the ACCA. As a result of changes to the TX exam format over time, the majority of past exam questions in their original format are not representative of current TX examination questions. The questions contained in this exam kit are therefore based on past exam questions but it has been necessary to adapt them to ensure that they are representative of questions in the examinations. The adaptations have been made to reflect the new style of exam, new legislative changes in recent Finance Acts, Tax law changes and IFRS® Standards terminology. We have also included new topics brought into the syllabus in some questions. Many of the questions within the kit are past ACCA exam questions, and the more recent questions (from 2005) are labelled as such in the index. Note that if a question within this kit has been adapted or changed in any way from the original version, this is indicated in the end column of the index below with the mark (A). Also included are the marking schemes for past ACCA examination questions to assist you in understanding where marks are earned and the amount of time to spend on particular tasks. Note that if a question has been changed from the original version, it will have also been necessary to change the original ACCA marking scheme. Therefore, if a question is marked as ‘ADAPTED’ you should assume that this also applies to the marking scheme. A number of questions included in the exam kit are referenced to two examination sittings e.g. March/June 2022. This is as a result of a change in policy made by the ACCA regarding the release of examination questions. Previously, examinations were released in their entirety. The ACCA now release a selection of questions from the March/June and September/December examinations. Therefore, questions referenced as such are taken from the sample released by the ACCA. KA PLAN PUBLISHING P.5 T X– U K: TAXA TION ( FA2023 ) KEY TO THE INDEX ANSWER ENHANCEMENTS We have added the following enhancements to the answers in this exam kit: Key answer tips All answers include key answer tips to help your understanding of each question. Tutorial note All answers include tutorial notes to explain some of the technical points in more detail. Tutor’s top tips For selected questions, we ‘walk through the answer’ giving guidance on how to approach the questions with helpful ‘tips from a top tutor’, together with technical tutor notes. These answers are indicated with the ‘footsteps’ icon in the index. Within the questions in the exam kit you will see the following icons, shown in the question requirements:  = word processing  = spreadsheet The icons highlighting the constructed response workspace tool alongside some of the questions are for guidance only – it is important to recognise that each question is different and that the answer space provided by ACCA in the exam is determined by both the technical content of the question as well as the quality assurance processes ACCA undertakes to ensure the student is provided with the most appropriate type of workspace. P.6 KA PLAN PUBLISHING  INDEX TO QU ES TIO NS AND ANSWE RS ONLINE ENHANCEMENTS Answer debrief For selected questions, we recommend that they are to be completed in full exam conditions (i.e. properly timed in a closed book environment). In addition to the examining team’s technical answer, enhanced with key answer tips and tutorial notes in this exam kit, online you can find an answer debrief by a top tutor that:  works through the question in full  explains key elements of the answer, and  ensures that the easy marks are obtained as quickly as possible. These questions are indicated with the ‘video’ icon in the index. Answer debriefs will be available on MyKaplan at: www.mykaplan.co.uk KA PLAN PUBLISHING P.7 T X– U K: TAXA TION ( FA2023 ) PRACTICE INCOME TAX AND NATIONAL INSURANCE QUESTIONS Page number Past exam Question Answer (Adapted) SECTION A OBJECTIVE TEST QUESTIONS 1 217 SECTION B OBJECTIVE TEST CASES Income tax basics and employment income 95 Philip & Charles 30 255 Dec 11 (A) 96 Kim Baxter 31 258 Jun 08 (A) Income tax basics and income from self‐employment 97 Foo Dee 33 260 Dec 06 (A) SECTION C CONSTRUCTED RESPONSE QUESTIONS Income tax basics and employment income 98 Jason 35 263 Mar/July 20 99 Poppy 36 267 Mar/Jun 22 100 Kazuo 37 271 June 23 101 Patience 39 275 Mar/Jun 16 (A) 102 Kagan 40 278 Sep/Dec 19 103 Dill 41 281 Sep/Dec 17 (A) 104 Richard Tryer 43 285 Jun 14 (A) 105 Dom 44 290 Sep/Dec 22 106 Tonie 45 293 Mar/Jun 19 (A) 107 Kat 47 296 Sep/Dec 18 (A) 108 Alicia 48 300 Sep/Dec 22 Income tax basics and income from self‐employment 109 Carol Courier 49 303 (A) 110 Idris Williams 50 305 111 Ethel 51 308 112 Robinette 52 311 Sep/Dec 19 (A) 113 George 53 313 Mar/Jun 16 (A) 114 Fleur 54 316 Mar/Jun 22 (A) 115 Paul 55 320 Mar/Jun 21 (A) P.8 KA PLAN PUBLISHING  INDEX TO QU ES TIO NS AND ANSWE RS Page number Past exam Question Answer (Adapted) Income tax basics and income from self‐employment 116 Dembe 56 325 Mar/Jun 19(A) 117 Na Style 57 328 Dec 09 (A) 118 Zhi 58 332 Mar/Jun 17 (A) 119 Jade 59 334 Sep/Dec 21 120 Hannah 60 338 June 23 121 Alfred and Amaia 61 342 Mar/Jun 21 Trading losses 122 Norma 62 346 (A) 123 Ashura 63 349 Sep 16 (A) 124 Dee Zyne 65 353 Jun 05 (A) 125 Samantha Fabrique 66 355 Dec 07 (A) 126 Michael and Sean 66 359 Jun 12 Partnerships 127 Sam, Tam and Uma 68 364 Sep/Dec 20 (A) 128 Amanda 69 369 Sep/Dec 21 129 Auy Man and Bim Men 70 374 Jun 10 (A) 130 Daniel, Francine and Gregor 72 379 Sep/Dec 15 (A) Pensions and NIC 131 John Beach 73 382 Jun 13 (A) 132 Ann, Basil and Chloe 74 387 Dec 08 (A) 133 Jack 75 392 Dec 16 (A) Self‐assessment379 134 Pi Casso 76 396 Jun 08 (A) 135 Ernest Vade382r 77 400 Jun 10 (A) 136 Sophie Shape287 78 403 Jun 15 SP (A) KA PLAN P UB L I S H I N G P.9 T X– U K: TAXA TION ( FA2023 ) PRACTICE CHARGEABLE GAINS QUESTIONS Page number Past exam Question Answer (Adapted) SECTION A OBJECTIVE TEST QUESTIONS 79 405 SECTION B OBJECTIVE TEST CASES Individuals – capital gains tax 171 Michael Chin 90 421 Jun 05 (A) 172 Bo 91 424 Dec 09 (A) 173 Alphabet Ltd 93 427 Jun 11 (A) 174 Jorge Jung 94 430 Dec 11 (A) 175 Albert and Charles 95 432 Dec 13 (A) 176 Zoyla 97 435 Dec 16 (A) 177 Hali and Goma 99 436 Mar/Jun 19 (A) Companies – chargeable gains 178 Hawk Ltd 101 438 Dec 08 (A) 179 Kat Ltd 102 441 Sep 16 (A) SECTION C CONSTRUCTED RESPONSE QUESTIONS Individuals – capital gains tax 180 David and Angela Brook 104 444 Dec 07 (A) 181 Bill Ding 105 448 182 Jerome 105 451 Mar/Jun 16 (A) 183 Ginger and Nigel 106 454 Jun 13 (A) 184 Mick Stone 107 458 Jun 14 (A) 185 Ruby 108 461 Sep/Dec 15 (A) 186 Daljeet 109 464 Companies – chargeable gains 187 Fogo Ltd and Netta Ltd 110 467 Sep/Dec 21 188 Luna Ltd 111 471 Jun 15 P.10 KA PLAN P UB L I S H I N G  INDEX TO QU ES TIO NS AND ANSWE RS PRACTICE INHERITANCE TAX QUESTIONS Page number Past exam Question Answer (Adapted) SECTION A OBJECTIVE TEST QUESTIONS 113 475 SECTION B OBJECTIVE TEST CASES 210 Lebna and Lulu 120 484 Mar/Jun 19 (A) 211 Tom 122 485 Dec 12 (A) 212 Afiya 123 488 Dec 13 (A) 213 Roman 125 491 Dec 16 (A) 214 Adana 127 493 Sep 16 (A) SECTION C CONSTRUCTED RESPONSE QUESTIONS 215 Blu 128 495 Dec 11 (A) 216 Jack and Tom 129 499 Dec 12 (A) 217 Aurora 130 502 Sep/Dec 20 (A) 218 Kendra Older 131 507 Jun 14 (A) 219 James 132 511 Mar/Jun 16 (A) 220 Marcus 133 514 Sep/Dec 2015 PRACTICE CORPORATION TAX QUESTIONS Page number Past exam Question Answer (Adapted) SECTION A OBJECTIVE TEST QUESTIONS 135 517 SECTION B OBJECTIVE TEST CASES Corporation tax basics and administration 259 Greenzone Ltd 148 536 Jun 13 (A) Relief for trading losses 260 Loser Ltd 150 539 Pilot 07 (A) With group aspects 261 Deutsch Ltd 151 543 Jun 13 (A) KA PLAN P UB L I S H I N G P.11 T X– U K: TAXA TION ( FA2023 ) Page number Past exam Question Answer (Adapted) SECTION C CONSTRUCTED RESPONSE QUESTIONS Corporation tax basics and administration 262 Harbour Ltd 153 546 Sept/Dec 20 (A) 263 Aoede Ltd, Bianca Ltd and Charon Ltd 154 551 Mar/Jun 19 (A) 264 Mixture Ltd 156 555 Mar/Jun 22 265 Venus Ltd 157 560 June 23 266 Stretched Ltd 159 565 Jun 05 (A) 267 Maison Ltd 160 567 Sept/Dec 19 (A) 268 E‐Commerce plc 162 571 Dec 14 (A) 269 Lucky Ltd 164 575 Sept/Dec 15 (A) Relief for trading losses 270 Starfish Ltd 165 580 Dec 11 (A) 271 Last Orders Ltd 167 585 Sep/Dec 17 (A) 272 Wretched Ltd 169 588 Dec 16 (A) 273 Crumble Ltd 171 592 Sep/Dec 22 274 Mooncake Ltd 174 596 Mar/Jun 21 With group aspects 275 Music plc 176 601 Dec 05 (A) 276 Jump Ltd 177 603 Mar/Jun 16 (A) 277 Ash Ltd 179 607 Sep/Dec 18 (A) 278 Clueless Ltd 182 611 Dec 12 (A) 279 Long Ltd and Road Ltd 184 616 Jun 14 (A) 280 Lena Ltd, Mekong Ltd and Nile Ltd 186 621 Mar/July 20 P.12 KA PLAN P UB L I S H I N G  INDEX TO QU ES TIO NS AND ANSWE RS PRACTICE VALUE ADDED TAX QUESTIONS Page number Past exam Question Answer (Adapted) SECTION A OBJECTIVE TEST QUESTIONS 189 625 SECTION B OBJECTIVE TEST CASES 303 Thidar 196 633 Mar/Jun 19 (A) 304 Candy Apple and Sugar Plum 198 634 Dec 13 (A) 305 Lithograph Ltd 200 636 Jun 06 (A) 306 Alisa 202 639 Sep 16 (A) 307 The Whitlock Sisters 203 640 Jun 12 (A) 308 Knight Ltd 205 643 Jun 13 (A) 309 Ardent Ltd 207 645 Dec 16 (A) SECTION C CONSTRUCTED RESPONSE QUESTIONS 310 Garfield 209 648 Mar/Jun 16 (A) 311 Victor Style 210 650 (A) 312 Denzil Dyer 211 651 Jun 07 (A) 313 Silverstone Ltd 212 652 Dec 12 (A) 314 Tardy plc 212 654 Dec 14 (A) 315 Smart Ltd 213 657 Sept/Dec 15 316 Zia 214 659 Jun 15 KA PLAN P UB L I S H I N G P.13 T X– U K: TAXA TION ( FA2023 ) P.14 KA PLAN PUBLISHING ANALYSIS OF PAST EXAMS The table below summarises the key topics that have been tested in recent exams. Key: Q The question references are to the number of the question in this edition of the exam kit.  Refers to questions which have not been included in the kit due to similarity to other recent questions. * Refers to topics that were included in the question when originally set, but with the adaptation of the question to the new style exam, this topic element has been removed from this question in the exam kit. Sep/Dec Mar/Jul Sep/Dec Mar/Jun Sep/Dec Mar/Jun Sep/Dec June 2019 2020 2020 2021 2021 2022 2022 2023 Principles of taxation/Ethics Tax avoidance vs evasion Q262 Q119 Income tax Exempt income Q102 Basic income tax Q102 Q98 Q115 Q119 Q99 Q108 Q100 computation  Q128 Q114 Q105 Savings income Q99 Q105 Dividend income Q102  Q127 Q115 Q105 Q100 Child benefit tax charge Q128 Reduction of PA Q102  Q127 Q114 Property income Q112 Q121 Q120 ISAs Q102 Residence Qualifying interest Q127 Employed individual Employed vs. self‐ employed Salary and bonus Q98 Q127 Q115 Q105 Q100 Q121 Q120 Exempt benefits Q112 Q98 Q121 Q105 Car and fuel benefit Q98 Q127 Q121 Q99 Q108 Q105 Living accommodation Q112 Q98 Q121 Q128 Q120 Payroll giving Beneficial loan Q98 Q127 Q120 Use/gift of assets Q99 Mileage allowance Q112 Q108 Q120 Q105 Professional subscriptions Q105 PAYE system Q98 Q99 Q105 KA PLAN PUBLISHING P.15 T X– U K: TAXA TION ( FA2023 ) Sep/Dec Mar/Jul Sep/Dec Mar/Jun Sep/Dec Mar/Jun Sep/Dec June 2019 2020 2020 2021 2021 2022 2022 2023 Self‐employed individual Adjustment to profits Q121 Q119 Q120 Capital allowances Q112 Q121 Q119 Q99 Q120 Basis of assessment rules Q112 Q127 Partnerships – allocation Q127 Q128 Q99 Tax planning Q115 Q119 Q114 Q128 Pensions Pension income Q127 Occupational pension Q102 Q98 Q127 Q100 Personal pension   contributions Annual allowance Q102 Income tax losses Relief against income Q99 National Insurance contributions Class 1  Q119 Q114 Q108 Q100 Q105 Class 2 Q114 Class 4 Q114 Capital gains Basic CGT computation Q102 Exempt assets Shares Insurance for destroyed assets Husband and wife Capital losses Planning Reliefs Business asset disposal relief Private residence relief Q217 Rollover relief Q187 Self‐assessment – individual Compliance checks Q112 Interest and penalties Q99 Record retention Q112 P.16 KA PLAN PUBLISHING  ANA L YS IS OF PA S T EXAMS Sep/Dec Mar/Jul Sep/Dec Mar/Jun Sep/Dec Mar/Jun Sep/Dec June 2019 2020 2020 2021 2021 2022 2022 2023 Inheritance tax PETs Exemptions Estate computation Q102 Q217 Due dates Q102 Transfer of nil rate band Q217 Residence nil rate band Q217 Corporation tax Residence Q280 Definition of accounting periods Adjustment to profits Q267 Q262 Q274 Q187 Q273 Q265 Capital allowances Q267 Q280 Q262 Q274 Q264 Q265 Lease premiums Q267 Q262 Q265 Basic TTP computation Q267  Q262 Q274 Q187 Q114 Property income Q267 Q262 Q264 Q273 Interest income Q267 Q187 Q265 Chargeable gains Q267 Q262 Q274 Q187 Q273 Q265 Qualifying donations Q274 Q273 Q265 Corporation tax liability Q267 Q280 Q262 Q274 Q273 Q100 Q265 Corporation tax losses Capital losses Q274 Q187 Trading losses Q274 Q273 Property losses Q274 Groups Group relief Q280 Q265 Gains groups Q187 Self‐assessment – companies Quarterly instalments Q280 Q264 Value added tax Registration VAT invoices Errors in a VAT return Pre‐registration input VAT Input VAT recovery KA PLAN PUBLISHING P.17 T X– U K: TAXA TION ( FA2023 ) P.18 KA PLAN PUBLISHING EXAM TECHNIQUE GENERAL COMMENTS  We recommend that you always read the questions and examination requirements carefully.  Divide the time you spend on questions in proportion to the marks on offer: – one suggestion for this examination is to allocate 1.8 minutes to each mark available (180 minutes/100 marks), so a 10 mark question should be completed in approximately 18 minutes. – within that, try to allow time at the start to read the question and plan your answer (see P.24 below) and at the end of each question to review your answer and address any obvious issues.  If you get completely stuck with a question: – flag the question in the CBE software and return to it later.  Spend the last five minutes of the examination: – reading through your answers, and – making any additions or corrections. SECTION A OBJECTIVE TEST QUESTIONS  Decide whether you want to attempt these at the start of the examination or at the end.  Stick to the timing principle of 1.8 minutes per mark. This means that the 15 OT questions in section A (30 marks) should take 54 minutes.  No credit for workings will be given in these questions; the answers will either be correct (2 marks) or incorrect (0 marks).  It is still important to carry out full workings for numerical questions. For centre based exams these can be done on scrap paper or using the on‐screen scratchpad. For remote invigilated exams you will not be able to use scrap paper, but will have to use the scratchpad. It is therefore essential to practice using this functionality prior to your exam. The ACCA practice platform can be used to familiarise yourself with using this function.  Work steadily. Rushing leads to careless mistakes and questions are designed to include answers that result from careless mistakes.  If you don’t know the answer, eliminate those options you know are incorrect and see if the answer becomes more obvious.  Remember that there is no negative marking for an incorrect answer. After you have eliminated the options that you know to be wrong, if you are still unsure, guess. KA PLAN PUBLISHING P.19 T X– U K: TAXA TION ( FA2023 ) SECTION B OT CASE QUESTIONS  There is likely to be a significant amount of information to read through for each case. You should begin by reading the OT questions that relate to the case, so that when you read through the information for the first time, you know what it is that you are required to do.  Each OT question is worth two marks. Therefore, you have 18 minutes (1.8 minutes per mark) to answer the five OT questions relating to each case. It is likely that all of the cases will take the same length of time to answer, although some of the OT questions within a case may be quicker than other OT questions within that same case.  Once you have read through the information, you should first answer any of the OT questions that do not require workings and can be quickly answered. You should then attempt the OT questions that require workings utilising the remaining time for that case.  All of the tips for section A are equally applicable to each section B question. SECTION C CONSTRUCTED RESPONSE (LONG) QUESTIONS  The constructed response questions in section C will require a written response rather than being OT questions. Therefore, different techniques need to be used to score well.  Unless you know exactly how to answer the question, spend some time planning your answer. Stick to the question and tailor your answer to what you are asked. Pay particular attention to the verbs in the question e.g. 'Calculate', 'State', 'Explain'.  If you do not understand what a question is asking, state your assumptions. Even if you do not answer in precisely the way the examining team hoped, you should be given some credit if your assumptions are reasonable.  You should do everything you can to make things easy for the marker. Your answer should: – have a clear structure – be concise. It is better to write a little about a lot of different points than a great deal about one or two points.  Section C Computations: – It is essential to include all your workings in your answers. Many computational questions require the use of a standard format e.g. income tax computations, corporation tax computations and capital gains. – Be sure you know these formats thoroughly before the examination and use the layouts that you see in the answers given in this book and in model answers. – Adopt a logical approach and cross reference workings to the main computation to enable the marker to find them easily. Do not leave a large gap between your answer and the workings. – You will be presented with a blank spreadsheet. A number of standard spreadsheet functions are available via the menu and tool bar for you to use when responding to the question. It is important to practise answering questions using the CBE software and to familiarise yourself with the CBE functionality, particularly the spreadsheet functions.  Section C Reports, memos and other documents: – Some questions ask you to present your answer in the form of a report, a memo, a letter or other document. P.20 KA PLAN PUBLISHING  EXAM TEC HN I QUE ADDITIONAL TIPS  Do not attempt a CBE until you have completed all study material relating to it.  On the ACCA website there is a CBE demonstration. It is ESSENTIAL that you attempt this before your real CBE. You will become familiar with how to move around the CBE screens and the way that questions are formatted, increasing your confidence and speed in the actual examination.  There is an additional constructed response (CR) workspace on the ACCA website which you can use to practice questions from this exam kit in a CBE environment.  Be sure you understand how to use the software before you start the examination. If in doubt, ask the assessment centre staff to explain it to you.  Questions are displayed on the screen and answers are entered using keyboard and mouse.  In addition to multiple choice type questions, CBEs will also contain other types of questions. You need to be sure you know how to answer questions of these types before you sit the examination, through practice. The types of objective test questions you could see in your CBE are as follows: Question type Description Example exam kit question Multiple choice Select one correct answer from a choice of four 2 or 4 Multiple response Select a given number of correct answers 33 Fill in the blank Input a numerical answer 3 Drag and drop Match chosen answer to chosen areas of the 154 screen Drop down list Select one correct answer from a drop down list 164 Hot area Select one or more areas in an image as a correct 1 answer (e.g. true or false) KA PLAN PUBLISHING P.21 T X– U K: TAXA TION ( FA2023 ) P.22 KA PLAN PUBLISHING EXAM SPECIFIC INFORMATION THE EXAM FORMAT OF THE EXAM The exam will be in THREE sections, and will be predominantly computational. Section A will consist of 15 objective test questions, each worth 2 marks. Section B will consist of three 10 mark questions which each comprise five objective test questions of 2 marks each. Section C will consist of one 10 mark question and two 15 mark questions. All questions are compulsory. Number of marks Section A: 15 objective test questions of 2 marks each 30 Section B: Three 10 mark questions covering any area of the syllabus 30 Section C: One 10 mark question covering any area of the syllabus 10 Two 15 mark questions, one focusing on income tax and one on corporation tax 30 ––– Total 100 ––– The CBE will be 3 hours long and students will have up to 10 minutes to familiarise themselves with the CBE system before starting the exam. Note that:  Section A and section B questions can be drawn from any area of the syllabus.  The two 15 mark section C questions could include a small number of marks in respect of other taxes.  There is no set order for the section C questions. In the specimen exam the 10 mark question appeared before the 15 mark questions, but the examining team could change the order. PASS MARK The pass mark for all ACCA Qualification examinations is 50%. KA PLAN PUBLISHING P. 23 T X– U K: TAXA TION ( FA2023 ) Remote invigilated exams In certain geographical areas it may be possible for you to take your exam remotely. This option, which is subject to strict conditions, can offer increased flexibility and convenience under certain circumstances. Further guidance, including the detailed requirements and conditions for taking the exam by this method, is contained on ACCA’s website at: https://www.accaglobal.com/an/en/student/exam‐entry‐and‐administration/about‐our‐ exams/remote‐exams/remote‐session‐exams.html SUGGESTED APPROACH TO THIS EXAM Decide in advance whether you will attempt section A, B or C first so that you are not wasting time on this decision in the real examination.  This is a personal choice and you have time on the revision phase to try out different approaches, for example, if you sit mock examinations.  A common approach is to tackle the short section A questions first, so they are out of the way, then section B and finally the longer constructed response questions in section C.  Others may prefer to tackle the longer section B and C questions first, as they will take longer than the individual questions in section A. You should complete at least one mock examination under examination conditions to try out your chosen approach in advance. Whatever your approach though, you must make sure that you leave enough time to attempt all questions fully and be very strict with yourself in timing each question. READING AND PLANNING Reading and planning are crucial elements of your examination technique and it is important that you allocate time in the examination to this. Spend time reading the questions carefully, particularly in sections B and C, where questions will be based on longer scenarios than the 2 mark OTs in section A. Whatever happens, always keep your eye on the clock and do not over run on any part of any question! As all questions are compulsory, there are no decisions to be made about choice of questions, other than in which order you would like to tackle them. Therefore, in relation to TX we recommend that you take the following approach to planning your answers:  Note down the amount of time you should spend on each part of each question.  Decide the order in which you think you will attempt each question in sections B and C: A common approach is to tackle the question you think is the easiest and you are most comfortable with first. Others may prefer to tackle the longest questions first, or conversely leave them to the last. It is usual however for students to tackle their least favourite topic and/or the most difficult question in their opinion last. Whatever your approach, you must make sure that you leave enough time to attempt all questions fully and be very strict with yourself in timing each question. P.24 KA PLAN PUBLISHING  EXAM S PEC IF IC INFORMATION  For each section C question in turn, read the requirements and then the detail of the question carefully. Always read the requirement first as this enables you to focus on the detail of the question with the specific task in mind. For section C computational questions: Note key numbers/information and key words in the question, scribble notes to yourself to remember key points in your answer. Jot down pro formas required if applicable. For section C written questions: Take notice of the format required (e.g. letter, memo, notes) and identify the recipient of the answer. You need to do this to judge the level of financial sophistication required in your answer and whether the use of a formal reply or informal bullet points would be satisfactory. Plan your beginning, middle and end and the key areas to be addressed and your use of titles and sub‐titles to enhance your answer. For all section C questions: Spot the easy marks to be gained in a question and parts which can be performed independently of the rest of the question. For example, writing down due dates of payment of tax, due dates for making elections, laying out basic pro formas correctly. Make sure that you do these parts first when you tackle the question.  As mentioned in the ‘Exam Technique’ section earlier, you should decide in advance of the real examination whether to attempt section A, B or C first. Always keep your eye on the clock and do not over run on any part of any question! DETAILED SYLLABUS The detailed syllabus and study guide written by the ACCA can be found at: www.accaglobal.com/en/student.html KA PLAN PUBLISHING P.25 T X– U K: TAXA TION ( FA2023 ) P.26 KA PLAN PUBLISHING KAPLAN’S RECOMMENDED REVISION APPROACH QUESTION PRACTICE IS THE KEY TO SUCCESS Success in professional examinations relies upon you acquiring a firm grasp of the required knowledge at the tuition phase. In order to be able to do the questions, knowledge is essential. However, the difference between success and failure often hinges on your examination technique on the day and making the most of the revision phase of your studies. The Kaplan study text is the starting point, designed to provide the underpinning knowledge to tackle all questions. However, in the revision phase, pouring over text books is not the answer. Kaplan Online knowledge checks help you consolidate your knowledge and understanding and are a useful tool to check whether you can remember key topic areas. Kaplan pocket notes are designed to help you quickly revise a topic area, however you then need to practice questions. There is a need to progress to full examination standard questions as soon as possible, and to tie your examination technique and technical knowledge together. The ACCA practice platform (https://cbept.accaglobal.com) should be used to practice questions in the same CBE layout as the real exam. The specimen exam and two past exams can be accessed on the platform and these will be updated to Finance Act 2023. A mock exam is also released shortly before the real exam. This allows you to practice questions with the real exam format and functionality, and to get accustomed to the tools you will need to use to present your answers well. Your responses to these questions will be saved, sections A and B will be marked automatically and you can self‐mark section C using marking guides and sample answers. It is recommended to practice as many questions as possible on the platform to familiarise yourself with how the software works. The importance of question practice cannot be over‐emphasised. The recommended approach below is designed by expert tutors in the field, in conjunction with their knowledge of the examining team and the recent real examinations. The approach taken for the Applied Skills Level exams is to revise by topic area. You need to practice as many questions as possible in the time you have left. OUR AIM Our aim is to get you to the stage where you can attempt examination standard questions confidently, to time, in a closed book environment, with no supplementary help (i.e. to simulate the real examination experience). Practising your examination technique on real past examination questions, in timed conditions, is also vitally important for you to assess your progress and identify areas of weakness that may need more attention in the final run up to the examination. In order to achieve this, we recognise that initially you may feel the need to practice some questions with open book help and exceed the required time. The approach below shows you which questions you should use to build up to coping with examination standard question practice, and references to the sources of information available should you need to revisit a topic area in more detail. KA PLAN PUBLISHING P.27 T X– U K: TAXA TION ( FA2023 ) Remember that in the real examination, all you have to do is:  attempt all questions required by the examination  only spend the allotted time on each question, and  get them at least 50% right! Try and practice this approach on every question you attempt from now to the real examination. EXAMINER COMMENTS We have included the examining team’s comments to the examination questions in this kit for you to see the main pitfalls that students fall into with regard to technical content. However, too many times in the general section of the report, the examining team comment that students had failed due to:  ‘misallocation of time’  ‘running out of time’ and  showing signs of ‘spending too much time on an earlier question and clearly rushing the answer to a subsequent question’. Good examination technique is vital. ACCA SUPPORT For additional support with your studies please also refer to the ACCA Global website. P.28 KA PLAN PUBLISHING KAPLAN’S TX EXAMINATION REVISION PLAN Stage 1: Assess areas of strengths and weaknesses Review the topic listings in the revision table plan below Determine whether or not the area is one with which you are comfortable Comfortable Not comfortable with the technical content with the technical content Read the relevant chapter(s) in Kaplan’s Study Text Attempt the Test your understanding examples if unsure of an area Attempt appropriate Online Knowledge checks Review the pocket notes on this area Stage 2: Practise questions Follow the order of revision of topics as recommended in the revision table plan below and attempt the questions in the order suggested. Note that although the plan is organised into different subject areas, the real examination questions will cover more than one topic, and therefore some parts of the examination questions set below will be on topics covered later in the revision plan. For each topic listed below you must also practice a selection of objective test questions covering that topic. Do bear in mind that some of the questions in this kit will take longer than 3.6 minutes each. Try to avoid referring to text books and notes and the model answer until you have completed your attempt. Try to answer the question in the allotted time. Review your attempt with the model answer and assess how much of the answer you achieved in the allocated examination time. KA PLAN P UB L I S H I N G P.29 T X– U K: TAXA TION ( FA2023 ) Fill in the self‐assessment box below and decide on your best course of action. Comfortable with question attempt Not comfortable with question attempts Focus on these areas by:  Reworking test your understanding examples in Kaplan’s Study Text  Revisiting the technical content from Kaplan’s pocket notes  Working any remaining questions on that area in the exam kit  Reattempting an examination Only revisit when comfortable with standard question in that area, on a questions on all topic areas timed, closed book basis Note that: The ‘footsteps questions’ give guidance on exam techniques and how you should have approached the question. The ‘answer debrief’ questions have an online debrief where a top tutor works through the question in full, explains key elements of the answer and how to gain marks. Stage 3: Final pre‐examination revision We recommend that you attempt at least one full mock examination containing a set of previously unseen examination standard questions. It is important that you get a feel for the breadth of coverage of a real examination without advanced knowledge of the topic areas covered – just as you will expect to see on the real examination day. Ideally this mock should be sat in timed, closed book, real examination conditions and could be:  a mock examination offered by your tuition provider and/or  the specimen exam in the back of this exam kit and/or  the last released examination (available shortly afterwards on MyKaplan and updated to the relevant Finance Act, if necessary). P.30 KA PLAN P UB L I S H I N G THE DETAILED REVISION PLAN Study Pocket Questions Date Topic Text note Tutor guidance Self‐assessment to attempt attempted Chapter Chapter Section B/C Personal income 2 1 Review the layout of an income tax computation and rates tax computation of tax. Section C in the examination will include at least one question focusing on income tax, and it is crucial that you are comfortable with the pro forma. Various aspects of income tax will also inevitably be tested in section A and possibly section B as well, and it is important to practice a cross‐section of these questions. – Residence 2 1 103(a) The rules to determine whether an individual is resident in 106(a) the UK are relatively complex. Revise the rules from the 129(a) pocket notes and practice this question, along with the relevant questions in Section A, where residence is most commonly tested. – Employment 5 2 103(b) A popular exam topic, almost guaranteed to form part of income and 105 the exam. assessable 96 There are many questions on this area. benefits 113(a) Start with Q103 (b) which covers a number of employment benefits. Follow this with Q105 which is also a past exam question on this area, covering two different employments. Q113 (a) tests the rules for determining whether an individual is employed or self‐employed and the consequences of this decision. KA PLAN PUBLISHING P.31 T X– U K: TAXA TION ( FA2023 ) Study Pocket Questions Date Topic Text note Tutor guidance Self‐assessment to attempt attempted Chapter Chapter Section B/C Q96 is an example of a section B case OT question. It is important that you practice these before your examination as you are likely to find it takes practice to isolate the information that you need for each individual question from the case information. – Property 4 1 104 Property income is a small part of these income tax income 121 questions. It is often tested as one of a few sources of income for an individual in the examination. – Badges of 7 3 – Revise the badges of trade rules from the pocket notes. trade You may be asked to apply the rules in the exam. – Adjusted 7&8 3&4 An adjustment of profits calculation is almost certain to be trading profit, 121(a) tested in the exam, although it may form part of a sole including 110 trader/partnership or corporation tax question. capital Q121 (a) tests some of the typical adjustments you may allowances see. and cash basis Q110 tests the cash basis of assessment. – National 11 7 113(b) and National insurance may form part of a section B or C insurance (c) question and can provide easy marks to a well‐prepared student. It is also likely to be tested in Section A. This question covers NICs for both an employee and a self‐ employed individual. P.32 KA PLAN PUBLISHING  KA PLAN’ S TX EXAM INATION RE VIS ION PLAN Study Pocket Questions Date Topic Text note Tutor guidance Self‐assessment to attempt attempted Chapter Chapter Section B/C – Trading losses 10 6 125 These questions cover the range of ways losses can be for individuals 124 tested – in an ongoing business, losses in the opening years 123 and losses on cessation. Q125 also tests the cap on income tax reliefs. Losses are a popular examination topic and it is important to be familiar with each of the reliefs. – Partnerships 9 5 127(a) The allocation of profits between partners is a relatively 129(b) straightforward computation, but does require practice. – Pensions 6 7 132 Like national insurance, pensions is a topic which is likely to 133 form a small part of a longer question, however the two questions listed here provide excellent practice of the various ways this topic could be tested. – Tax admin for 12 8 134 Administration is highly likely to be tested in sections A and individuals 136 B as an OT question. It is vital to learn the dates for submission and payment as well as the potential penalties and interest. Consolidation of 101 Having revised all of the above topics, attempt Q101, Q109 income tax 109 and Q127, these questions incorporate many aspects of 127 the taxation of individuals. Don’t forget to practice a number of section A questions on income tax if you haven’t already done so. Inheritance tax 22 17 215 IHT can be tested in all three sections of the examination (IHT) 219 and therefore it is important to study this area. Use your 220 pocket notes to revise the key facts and techniques. Warm up with Q215 then practice questions 219 and 220. KA PLAN PUBLISHING P.33 T X– U K: TAXA TION ( FA2023 ) Study Pocket Questions Date Topic Text note Tutor guidance Self‐assessment to attempt attempted Chapter Chapter Section B/C Corporation tax 13 9 – Review the layout of a corporation tax computation and computation the rates of tax. One of the 15 mark section C questions will focus on CT, and it is crucial that you are comfortable with the pro forma. There may also be a section B question and certainly some section A questions as well. – Adjustment of 13 9 262 It is important to be comfortable with the differences profits and 269 between sole traders and companies for adjustments to capital 259 profits and capital allowances. allowances Use Q262 to check that you are clear about these differences, then attempt Q269, which is classic example of this type of question. Q259 is an example of a section B OT case question on corporation tax. – Property 13 9 264(d) There are minor but important differences between taxing income property income for individuals and companies. This question covers property income for a company. – Long periods 13 9 266 In order to deal with a long period of account, you need to of account learn the rules regarding apportioning different types of income between the two periods. Having revised these rules from the pocket notes, practice them using this question. This also tests the calculation of the corporation tax liability when an accounting period straddles two financial years with different rates of corporation tax. P.34 KA PLAN PUBLISHING  KA PLAN’ S TX EXAM INATION RE VIS ION PLAN Study Pocket Questions Date Topic Text note Tutor guidance Self‐assessment to attempt attempted Chapter Chapter Section B/C – Corporation 14 10 270 Many students are daunted by loss questions, however a tax losses 271 systematic approach is all that is required and practice is 273 key. Remind yourself of the layout required using the pocket notes, and practice the test your understandings from the study text if you are not confident, before attempting these questions. – Groups 15 11 275 Groups are often tested as part of a corporation tax question. 276 Q276 tests group relief and Q275 tests the rules for 261 determining a capital gains group. Q261 is an example of a section B case OT question. – Tax admin for 16 12 278(b) Administration could make up part of a constructed a company 279(b) response question so you need to be prepared for this. It is also highly likely to be tested in sections A and B as an OT question. It is vital to learn the dates for submission and payment as well as the potential penalties and interest. Chargeable gains 17 13 – Chargeable gains could appear in section B or C and these for individuals questions will usually test a wide variety of the topics below. They are also likely to be tested in Section A. Revise the basic computation using the pocket notes before looking at the detailed areas. Chattels, shares, 18, 19 & 14 & 15 175 These questions demonstrate how various aspects of PRR, Business 20 180 capital gains will be tested in one question. asset disposal 185 Few of these areas are technically challenging, however, it relief is important that you can tackle them all. KA PLAN PUBLISHING P.35 T X– U K: TAXA TION ( FA2023 ) Study Pocket Questions Date Topic Text note Tutor guidance Self‐assessment to attempt attempted Chapter Chapter Section B/C – Deferral 20 15 181 Recognising which deferral reliefs apply and whether they reliefs 182 are available in full is important These questions cover all these reliefs and provide excellent practice. Chargeable gains 21 16 187 Remind yourself of the different gains rules for companies, for companies and test your understanding using this question. – Quoted 19 & 21 14 & 16 188 A brief revision of the share pool and matching rules from shares the pocket notes may be useful. Then attempt this question which tests the capital gains rules for companies, including share pooling. Value added tax 23 & 24 18 306 Start by reviewing the examiner’s VAT article. 307 VAT could be tested in any of the three sections so it is 312 important that you practise VAT questions from both 314 sections. Scenario style N/A 19 100 These questions test a range of subjects and the tax rules exam questions 102 covered are not complex, however, the style of questions 104 differs from the others in the kit. Look at the different styles of question using the chapter in the pocket notes, 114 and then ensure you are comfortable with the different 186 question styles by practicing each of these questions. 218 Note that not all of the Sections B and C questions in the exam kit are referred to in the programme above. We have recommended an approach to build up from the basics to examination standard Section B and C questions using a selection of the exam kit questions. The remaining questions are available in the kit for additional practice for those who require more questions on some areas. It is also vital that you practice Section A questions on all topics. P.36 KA PLAN PUBLISHING TAX RATES AND ALLOWANCES Tax rates and allowances will be produced in the examination for TX for the June 2024 to March 2025 sittings which will contain the following information. SUPPLEMENTARY INSTRUCTIONS 1 Calculations and workings need only be made to the nearest £. 2 All apportionments should be made to the nearest month. 3 All workings should be shown in Section C. INCOME TAX Normal Dividend rates rates Basic rate £1 – £37,700 20% 8.75% Higher rate £37,701 – £125,140 40% 33.75% Additional rate £125,141 and over 45% 39.35% Savings income nil rate band – Basic rate taxpayers £1,000 – Higher rate taxpayers £500 Dividend nil rate band £1,000 A starting rate of 0% applies to savings income where it falls within the first £5,000 of taxable income. Personal allowance Personal allowance £12,570 Transferable amount £1,260 Income limit £100,000 Where adjusted net income is £125,140 or more, the personal allowance is reduced to zero Residence status Days in UK Previously resident Not previously resident Less than 16 Automatically not resident Automatically not resident 16 to 45 Resident if 4 UK ties (or more) Automatically not resident 46 to 90 Resident if 3 UK ties (or more) Resident if 4 UK ties 91 to 120 Resident if 2 UK ties (or more) Resident if 3 UK ties (or more) 121 to 182 Resident if 1 UK tie (or more) Resident if 2 UK ties (or more) 183 or more Automatically resident Automatically resident KA PLAN PUBLISHING P.37 T X– U K: TAXA TION ( FA2023 ) Child benefit income tax charge Where income is between £50,000 and £60,000, the charge is 1% of the amount of child benefit received for every £100 of income over £50,000. Car benefit percentage The relevant base level of CO2 emissions is 55 grams per kilometre. The percentage rates applying to petrol cars (and diesel cars meeting the RDE2 standard) with CO2 emissions up to this level are: 51 grams to 54 grams per kilometre 15% 55 grams per kilometre 16% The percentage for electric cars with zero CO2 emissions is 2%. For hybrid‐electric cars with CO2 emissions between 1 and 50 grams per kilometre, the electric range of the car is relevant: Electric range 130 miles or more 2% 70 to 129 miles 5% 40 to 69 miles 8% 30 to 39 miles 12% Less than 30 miles 14% Car fuel benefit The base figure for calculating the car fuel benefit is £27,800. Company van benefits The company van benefit scale charge is £3,960, and the van fuel benefit is £757. A van with zero C02 emissions does not give rise to a benefit. Individual Savings Accounts (ISAs) The overall investment limit is £20,000. Rent‐a‐room relief The rent‐a‐room relief limit is £7,500. Pension scheme limits Annual allowance £40,000 Minimum allowance £4,000 Income limit £240,000 Lifetime allowance £1,073,100 The maximum contribution that can qualify for tax relief without any earnings is £3,600. P.38 KA PLAN PUBLISHING  TAX RA TES A N D A LLOWANCES Approved mileage allowance: cars Up to 10,000 miles 45p Over 10,000 miles 25p Capital allowances: rates of allowance Plant and machinery Main pool 18% Special rate pool 6% Cars New cars with zero CO2 emissions 100% Second‐hand cars with zero CO2 emissions 18% CO2 emissions between 1 and 50 grams per kilometre 18% CO2 emissions over 50 grams per kilometre 6% Annual investment allowance Rate of allowance 100% Expenditure limit £1,000,000 Structures and buildings allowance Straight‐line allowance 3% Cash basis accounting Revenue limit £150,000 Cap on income tax reliefs Unless otherwise restricted, reliefs are capped at the higher of £50,000 or 25% of income. CORPORATION TAX Financial year 2021 2022 2023 Small profits rate N/A N/A 19% Main rate 19% 19% 25% Lower limit N/A N/A £50,000 Upper limit N/A N/A £250,000 Standard fraction N/A N/A 3/200 Marginal relief Taxable total profits (Upper limit – Augmented profits) × Standard fraction × Augmented profits Quarterly instalments Profit threshold £1,500,000 KA PLAN PUBLISHING P.39 T X– U K: TAXA TION ( FA2023 ) VALUE ADDED TAX Standard rate 20% Registration limit £85,000 Deregistration limit £83,000 Penalties for late VAT payments Days late Penalty Up to 15 days None 16 to 30 days 2% More than 30 days 4% plus a 4% daily penalty INHERITANCE TAX: tax rates Nil rate band £325,000 Residence nil rate band £175,000 Rate of tax on excess – Lifetime rate 20% – Death rate 40% Inheritance tax: taper relief Percentage Years before death reduction More than 3 but less than 4 years 20% More than 4 but less than 5 years 40% More than 5 but less than 6 years 60% More than 6 but less than 7 years 80% CAPITAL GAINS TAX: tax rates Normal Residential rates property Lower rate 10% 18% Higher rate 20% 28% Annual exempt amount £6,000 Capital gains tax: Business asset disposal relief and investors’ relief Lifetime – business asset disposal relief £1,000,000 limit – investors’ relief £10,000,000 Rate of tax 10% P.40 KA PLAN PUBLISHING  TAX RA TES A N D A LLOWANCES NATIONAL INSURANCE CONTRIBUTIONS Class 1 Employee £1 – £12,570 per year Nil £12,571 – £50,270 per year 12% £50,271 and above per year 2% Class 1 Employer £1 – £9,100 per year Nil £9,101 and above per year 13.8% Employment allowance £5,000 Class 1A 13.8% Class 2 £3.45 per week Lower profits limit £12,570 Class 4 £1 – £12,570 per year Nil £12,571 – £50,270 per year 9% £50,271 and above per year 2% RATES OF INTEREST (assumed) Official rate of interest 2.25% Rate of interest on underpaid tax 6.50% Rate of interest on overpaid tax 3.00% STANDARD PENALTIES FOR ERRORS Taxpayer behaviour Maximum Minimum penalty Minimum penalty – unprompted penalty – disclosure prompted disclosure Deliberate and concealed 100% 30% 50% Deliberate but not concealed 70% 20% 35% Careless 30% 0% 15% KA PLAN PUBLISHING P.41 T X– U K: TAXA TION ( FA2023 ) P.42 KA PLAN PUBLISHING TIME LIMITS AND ELECTION DATES Income tax Election/claim Time limit For 2023/24 Agree the amount of trading 4 years from the end of the tax year in 5 April 2028 losses to carry forward which the loss arose Current and prior year set‐off 12 months from 31 January following the 31 January 2026 of trading losses against total end of the tax year in which the loss arose income (and chargeable gains) Three year carry back of 12 months from 31 January following the 31 January 2026 trading losses in the opening end of the tax year in which the loss arose years Three year carry back of 4 years from the end of the last tax year of 5 April 2028 terminal trading losses in the trading closing years National Insurance Contributions Class 1 employee and 17 days after the end of each tax month 22nd of each employer’s under PAYE system month – pay days (14 days if not paid electronically) Class 1A NIC – pay day 22 July following end of tax year 22 July 2024 (19 July if not paid electronically) Class 2 NICs – pay day Paid under self‐assessment with balancing 31 January 2025 payment Class 4 NICs – pay days Paid under self‐assessment with income See self‐ tax assessment Capital gains tax Replacement of business asset 4 years from the end of the tax year: 5 April 2028 for relief for individuals – in which the disposal occurred or 2023/24 sale or (Rollover relief) acquisition (if – the replacement asset was acquired later event) whichever is later Gift holdover relief of gain on 4 years from the end of the tax year in 5 April 2028 the gift of a business asset which the disposal occurred (Gift relief) Business asset disposal relief 12 months from 31 January following the 31 January 2026 end of the tax year in which the disposal occurred Determination of main private 2 years from the acquisition of the second residence property KA PLAN PUBLISHING P.43 T X– U K: TAXA TION ( FA2023 ) Self‐assessment – individuals Election/claim Time limit For 2023/24 Pay days for income tax and 1st instalment: class 4 NIC 31 January in the tax year 31 January 2024 2nd instalment: 31 July following the end of tax year 31 July 2024 Balancing payment: 31 January following the end of tax year 31 January 2025 Pay day for CGT on residential 60 days after the disposal property disposals Pay day for CGT (balance) and 31 January following the end of tax year 31 January 2025 class 2 NIC Filing dates If notice to file issued by Paper return: 31 October following end of 31 October following end of tax year 31 October 2024 tax year Electronic return: 31 January following end of tax year 31 January 2025 If notice to file issued after 31 October following end of 3 months from the date of issue of the tax year notice to file Retention of records Business records 5 years from 31 January following end of 31 January 2031 the tax year Personal records 12 months from 31 January following 31 January 2026 end of the tax year HMRC right of repair 9 months from date the return was filed Taxpayer’s right to amend a 12 months from 31 January following 31 January 2026 return end of the tax year Taxpayer’s claim for 4 years from the end of the tax year 5 April 2028 overpayment relief HMRC can open an enquiry 12 months from submission of the return HMRC can raise a discovery assessment – No careless or deliberate 4 years from the end of the tax year 5 April 2028 behaviour – Tax lost due to careless 6 years from the end of the tax year 5 April 2031 behaviour – Tax lost due to deliberate 20 years from the end of the tax year 5 April 2043 behaviour Taxpayer’s right of appeal 30 days from the assessment against an assessment – appeal in writing P.44 KA PLAN PUBLISHING  TIME LI MI TS A ND E LE CT ION S DA TES Corporation tax Election/claim Time limit Replacement of business asset relief for 4 years from the end of the accounting period: companies (Rollover relief) – in which the disposal occurred or – the replacement asset was acquired whichever is later Offset trading losses brought forward 2 years from the end of the accounting period in against total profits (income and gains) which the loss is relieved Current year set‐off of trading losses against 2 years from the end of the accounting period in total profits (income and gains), and which the loss arose 12 month carry back of trading losses against total profits (income and gains) Surrender of trading losses to other group 2 years after the claimant company’s accounting companies (Group relief) period Election for transfer of capital gain or loss 2 years from the end of the accounting period in to another company within the gains group which the disposal occurred by the company actually making the disposal Self‐assessment – companies Election/claim Time limit Pay day for small and medium companies 9 months and one day after the end of the accounting period Pay day for large companies Instalments due on 14th day of: – Seventh, tenth, thirteenth, and sixteenth month after the start of the accounting period Filing dates Later of: – 12 months from the end of the accounting period – 3 months from the issue of a notice to deliver a corporation tax return Company’s claim for overpayment relief 4 years from the end of the accounting period HMRC can open an enquiry 12 months from the actual submission of the return Retention of records 6 years from the end of the accounting period KA PLAN PUBLISHING P.45 T X– U K: TAXA TION ( FA2023 ) Value added tax Election/claim Time limit Compulsory registration Historic test: – Notify HMRC 30 days from end of the month in which the threshold was exceeded – Charge VAT First day of second month after the month when taxable supplies exceeded the threshold Future test: – Notify HMRC 30 days from the date it is anticipated that the threshold will be exceeded – Charge VAT The date it is anticipated that the threshold will be exceeded (i.e. the beginning of the 30 day period) Compulsory deregistration Notify HMRC 30 days from cessation Filing of VAT return and payment of VAT One month and seven days after the end of the return period P.46 KA PLAN PUBLISHING Section 1 PRACTICE INCOME TAX AND NATIONAL INSURANCE QUESTIONS PRACTICE SECTION A OBJECTIVE TEST QUESTIONS INCOME TAX BASICS AND EMPLOYMENT INCOME 1 Said has made a number of investments during the tax year. Tick the appropriate box to show which of the following investments will generate taxable income and which will generate exempt income. Taxable Exempt £400 in shares in the company he works for £1,000 in an Individual Savings Account £800 in a NS&I investment account £500 purchasing a NS&I certificate 2 March 2020 OT question Dane and Zara are a married couple. They jointly own a residential property which is let to tenants. In the tax year 2023/24 the property business income from the property is £20,000. Dane owns 25% of the property and Zara owns the other 75%. No election has been made in relation to the ownership of the property. Zane earns employment income of £65,000 and Dane receives £1,788 of child benefit in the tax year 2023/24. Dane has no other income. Which TWO of the following statements are true in relation to Zara’s income tax liability for the tax year 2023/24? A Zara’s taxable income is £62,430 B Zara can reduce her income tax liability by claiming the transferable personal allowance (the “marriage allowance”) C It would be beneficial to Zara if the couple were to make a joint election to HM Revenue and Customs (HMRC) specifying their actual ownership share in the residential property D A child benefit charge of £1,788 will be added to Zara’s income tax liability KA PLAN PUBLISHING 1 T X– U K: TAXATION ( FA2023 ) 3 Ines is a sole trader. During the tax year 2023/24 she had taxable trading income of £106,800 and received dividend income of £1,500. Ines made a gift aid donation of £2,000 (gross) during the tax year 2023/24. What amount of personal allowance is Ines entitled to for the tax year 2023/24? £ 4 Genna and Wayne are a married couple. In the tax year 2023/24 Genna had a salary of £5,000 and Wayne had property income of £40,650. They have made an election to transfer the fixed amount of personal allowance from Genna to Wayne. What is Wayne’s income tax liability for the tax year 2023/24? A £4,356 B £4,102 C £5,364 D £5,868 5 September 2015 OT question (ADAPTED) Tick the appropriate box to show which of the following items of expenditure are deductible in the calculation of an individual’s taxable income. Deductible Not deductible A contribution into a personal pension scheme A charitable gift aid donation A contribution into an employer’s occupational pension scheme A charitable donation made under the payroll deduction scheme 6 Olayide is provided with van by her employer on 6 April 2023, which she uses 60% for business and 40% for private purposes during the tax year 2023/24. The van has a list price of £30,000 and CO2 emissions of 158 grams per kilometre. Olayide’s employer also pays for fuel used on private journeys in the van. What is Olayide’s total van and van fuel benefit for the tax year 2023/24? £ 2 KA PLAN P UB L I S H I N G  PRACTICE IN COME TAX A ND N A T IO NA L IN SURAN CE QUESTIONS : S E CTI O N 1 7 Ifram has been employed for many years and has also recently become a partner in a partnership. He is in the process of completing his tax return and has asked your advice regarding the interest payments he has made. Identify, by ticking the appropriate box, whether his interest payments represent qualifying interest and are deductible from his total income or are not qualifying. Qualifying interest Not qualifying