ECMDocument.

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Tutor Notes

ACCA Paper F6 Taxation (UK) FA 2011

For exams in June 2012 and December 2012

To be used with the BPP Study Text for exams in June 2012 and December 2012 (FA 2011 edition)

ii

All our rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd.

BPP Learning Media Ltd 2012

First edition 2009 Fourth edition 2012

ISBN 9781 4453 2515 6 (Previous edition 9781 4453 2054 0)

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library

Published by

BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA

www.bpp.com/learningmedia

Introduction iii

CO

NTE

NTS

So what are the benefits of our Tutor Notes?

page iv

How do I use the Tutor Notes?page v

Teaching session plannerspage ix

chapter 1 INTRODUCTION TO THE UK TAX SYSTEM

page 1

chapter 2 THE COMPUTATION OF TAXABLE INCOME AND

THE INCOME TAX LIABILITYpage 11

chapter 3 EMPLOYMENT INCOME

page 23

chapter 4 TAXABLE AND EXEMPT BENEFITS.

THE PAYE SYSTEMpage 31

chapter 5 PENSIONS

page 41

chapter 6 PROPERTY INCOME

page 49

chapter 7 COMPUTING TRADING INCOME

page 55

chapter 8 CAPITAL ALLOWANCES

page 61

chapter 9 ASSESSABLE TRADING INCOME

page 71

chapter 10 TRADING LOSSES

page 77

chapter 11 PARTNERSHIPS AND LIMITED LIABILITY

PARTNERSHIPSpage 85

chapter 12 NATIONAL INSURANCE CONTRIBUTIONS

page 91

chapter 13 COMPUTING CHARGEABLE GAINS

page 97

chapter 14 CHATTELS AND THE PRINCIPAL PRIVATE RESIDENCE EXEMPTION page 113

chapter 15 BUSINESS RELIEFS page 121

chapter 16 SHARES AND SECURITIES page 131

chapter 17 SELF-ASSESSMENT AND PAYMENT OF TAX BY INDIVIDUALS page 139

chapter 18 INHERITANCE TAX page 151

chapter 19 TAXABLE TOTAL PROFITS page 165

chapter 20 COMPUTING THE CORPORATION TAX LIABILITY page 177

chapter 21 CHARGEABLE GAINS FOR COMPANIES page 183

chapter 22 LOSSES page 193

chapter 23 GROUPS page 199

chapter 24 OVERSEAS MATTERS FOR COMPANIES page 205

chapter 25 SELF-ASSESSMENT AND PAYMENT OF TAX BY COMPANIES page 213

chapter 26 AN INTRODUCTION TO VAT page 219

chapter 27 FURTHER ASPECTS OF VAT page 235

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INTRODUCING BPP LEARNING MEDIAS TUTOR NOTES

BPP Learning Medias Tutor Notes for the ACCA qualification have been developed under the guidance of experienced tutors from BPPs classroom courses division and have been written by tutors with many years experience of teaching ACCA students.

The Notes have been specially configured to add value in all the different teaching environments in which BPP Learning Media materials are used throughout the world. We pilot tested the concept in front of BPP students using a variety of technologies reflecting the range available in adopting colleges and we refined them. Whether you are using a chalkboard or a smartboard, we are confident these notes will enhance any course, help students pass their ACCA exams and that you will find students recommending your courses to their friends.

So what are the benefits of our Tutor notes?

Benefit 1: High standard of professional course presentation Students remember how their tutors performed in the classroom and they keep the course notes their college gives them and show them to friends. Our Tutor Notes will enhance the impression you make on your students and their friends impression of your college.

With notes, graphics and carefully written Learning Examples pre-prepared, you can devote your preparation time to deciding how to enhance your delivery, motivate interest and help individual learners.

Because our Tutor Notes are produced by the market-leading ACCA publisher they have a consistent, professional appearance.

(The Passcards graphics used in the notes are available on request as PDFs, so you can incorporate multimedia in your classrooms. This format means they can be enlarged and printed for attachment to chalkboards, made into acetates, projected from beamersor displayed on smartboards.)

Benefit 2: Flexibility, so you can add value as you see fit Unlike other course notes, our Tutor Notes do not impose someone elses script on you. Instead they use Passcards graphics to highlight the essential knowledge elements of each topic and useful Learning Examples to convey and reinforce the learning. Experienced tutors will add value in their own ways. And tutors new to the subject have the reassurance of discreet expert guidance on ways to deliver the topic and the key points to make.

Introduction v

Benefit 3: The right format The Tutor Notes are designed to be used as part of the tried-and-tested approach of paper media, text books and good tutors in classrooms. You dont need to register your students with us and we dont expect them to rely on the Internet to read their books. If you adopt our study materials, the Tutor Notes can be hosted on your network. On request, we can facilitate this and provide multimedia support right up to full hosted virtual learning environments. We know you will choose the formats that are right for you - and we are ready to help.

Benefit 4: Unique integration Tutor Notes follow the same sequence as our Official Publisher Study Text for the subject. Each topic is covered in the same consistent way and the Notes provide signposts to you and your students on where to look in the Study Text for more information and question practice.

Benefit 5: Continuity Where courses are team-taught, or where tutors change mid-programme, the Tutor Notes provide continuity because tutors can see how far their colleagues have progressed through the course. And for students who miss classes, the notes provide a ready record of what they have missed.

How do I use the Tutor Notes?

Your students must bring their BPP Study Texts to each session as we recommend you incorporate material and features from the Study Text into your teaching.

One set of notes for you, one for your students You will actually be provided with two sets of notes for each subject.

Student Notes are arranged in double-page spreads, with the Passcards diagram for each topic on the left-hand side (LHS) and some introductory context and Learning Examples (essentially classroom questions) on the right-hand side (RHS).

Tutor Notes are page-for-page the same as the Student Notes. They reproduce the content of the Student Notes but the tutor version also has annotations to the Passcards diagram and, on the RHS, additional content such as teaching and topic tips and the solutions to the Learning Examples.

Heres what we recommend you do.

Print out and duplicate the Student Notes and provide one copy to each student as part of their course material along with the BPP Learning Media Study Text and other adopted media. The files are arranged so that they print out double-sided (duplex) to save paper. However they can be printed single-sided without any changes to the PDFs we provide.

Print out one copy of the Tutor Notes for yourself, for your teaching file. Decide whether to hand out Student Notes as one complete bank at the beginning of the

course, or session by session. Some colleges prefer to hand out Notes in instalments to ensure that students attend all sessions.

The final chapter of the Student Notes is a bank of solutions to the Learning Examples used in the teaching sessions. You may prefer to hold these in reserve so that students attempt the Learning Examples rather than look for answers in the back of the Notes.

vi

Session planning The Notes are arranged as chapters in the same order as the BPP Learning Media Study Text and other resources for the subject. Chapters are topic based, and because topics vary in complexity the chapters are of varying length. A teaching session may cover several short chapters or it may not be long enough to cover a long chapter on a complex topic. Recommended session plans for condensed (three-day) and full-length (six-day) courses, showing how chapters may be covered, are shown on page ix onwards. These session plans can be adapted to fit the length of course your college offers.

Teaching the topic The Notes were designed, and developed further following pilot sessions, to support tutors preference for the following approach to teaching.

Step 1 Display the Passcards graphic from the LHS on a screen (more below).

Step 2 Introduce the topic by speaking around the Context note (which is also in the Student Notes), linking it to the previous topic or explaining why it matters to the accounting profession, the business environment or particular organisations.

Step 3 Speak about each element of the Passcards using the callouts on the Tutor Notes version as guidance. (These annotations can be added by hand to the graphic on screen for the students to copy into their notes (more below)).

Step 4 Return to the RHS of the Tutor Notes and speak around the Key Learning Points to add emphasis and reassure students on what is important. Students can be encouraged to take their own notes.

Step 5 Topic Tips can be used in various ways. Stating how and when the topic was examined focuses the student and provides reassurance that the tutor knows the exam.

Step 6 The Learning Examples are written especially for the Notes, they do not appear in any other BPP Learning Media product. They provide illustrations or reinforcement of the topic. Set them for the class to attempt and then debrief them before moving on (more below).

Displaying the Passcard graphics It is not essential that your college has the technology to display the Passcards graphics from the LHS of the Tutor Notes. The Student Notes do include these and, in pilot testing, tutors were able to provide perfectly intelligible lectures by referring students to them. The ability to display the graphics to the class, and - probably more importantly - to annotate them, does improve the quality of presentation, however.

Tutors in our pilot studies who were not able to display the Passcards graphic used several devices to help students to understand which part of the graphic was being referred to.

Referring to the Passcards using a clockface metaphor, such as The points about x at 12 oclock to refer to something at top-centre of the graphic

Reading out the wording from the graphic slowly before talking about it Holding up the LHS of their Tutor Notes (or those of a student in the front row to avoid the

class seeing the tutors crib notes on the Tutor Notes version)

Other technologies that can be used to display the Notes include:

Tablet PC connected to a beamer. We have found this to be the best technology. Converting the Student Notes into Journal documents means that you can annotate the graphics and fill in Learning Example solutions using the tablet, and students can copy your annotations and solutions into their Notes. To do this open the PDF, select Print, choose Journal Note Writer and then once it has converted you can save it to the PC. This approach also allows you to save the Journal file from the lesson with the annotations and solutions. Students might ask for these to be emailed to them but this raises two problems:

Introduction vii

The files are very large and will crash many email accounts. The student will need to have Journal reader on their PC to read them. Journal reader is

available as a free download from the Microsoft site but obtaining it can present difficulties, particularly on work machines if the employers IT security policy forbids downloads.

Hosting the Journal files on a colleges virtual learning environment may overcome the problem of download size. For convenience the Student Notes are provided as a single PDF. This means that you cannot post individual chapters but will have to re-use the same Journal file at each meeting of the class and re-post to the VLE.

Conventional PC connected to a beamer. Displaying the PDF of the Student Notes helps students navigate through their own notes and enables you, the tutor, to point at the Passcards with a light-pointer or your hands. Without additional software and a tablet to write on it is not possible to annotate the notes, however.

Printed on to acetate and used on an OHP. This is more effective than using a PC if you are unable to annotate the projected image from the PC. Putting the acetate under a screen roll or clean acetate on the OHP means that you can annotate without having to clean or reprint the acetate with the Passcards graphic on it. You can use colour to emphasise points and you could well find that your handwriting is better compared to when using PC tablets.

Printed out as an enlarged diagram and attached to chalkboard. The Notes are A4 format. These can be enlarged to A3 on most photocopiers but even at double-size these are not legible from a distance. So why not trim round the Passcards graphic, fix it to the middle of the chalkboard and then write the call-outs at a legible size on the chalkboard outside the paper graphic. Students can look at their notes, see where you are indicating and add in the call-out.

Using the Learning Examples in the Student Notes The Learning Examples have been specially written to reinforce the Key Learning Points for each Passcards graphic. Whilst not necessarily reflecting the types of question that your students could face in the exam, they are an excellent means within a classroom environment of testing key points that will form part of the larger questions that appear in exam papers. They also provide you with an opportunity to encourage discussion and explore issues, and enable you to circulate amongst the students to check their understanding of topics - for example by looking over their shoulder at what they are writing or by listening to conversations about discussion Learning Examples.

The icons beside the Learning Examples denote our recommendations on how each may be used.

Pen icon

This denotes a Learning Example where students should produce a written response. This will probably involve calculations, the completion of pro-formas or the evaluation or discussion of a problem.

Some Learning Examples require brief written answers that can be fitted into the space provided on the RHS of the Student Notes. Others will have longer solutions and so you should advise students to write solutions on file paper and to insert this behind the relevant page of their Notes.

A successful strategy is to set the Learning Example and to provide the students with time to complete it. Circulate amongst the students and youll be able to determine how the class is coping with it.

It might be generally understood and you wont need to intervene. It may be causing general problems for the class. In this case you may decide to call a halt

and to give guidance on how to interpret the question and/or how to develop the solution.

Difficulties might be experienced by a few students. In this case you can help each individually or, if it is the same difficulty, gather together the students and provide help to them as a group.

Debriefing written Learning Examples can be done by open discussion, working through on the board/screen, or by directing students to turn to the solution at the back of the Student Notes. In each case a vital part of the learning process will be to encourage students to ask questions about things they are unsure of. In some subjects there will be no single correct solution and so discussion of alternative answers should be encouraged (providing their interpretation of the question is right and the points being made are valid).

viii

Discussion icon

Discussion Learning Examples are principally for reinforcing knowledge and will be more valuable in some subjects than others. If students query the value of these Examples, given that their ACCA exams are written papers, you can emphasise that:

Discussion helps them through the process of analysing the problem and formulating a solution, which is what they will need to do in the exam, but they should remember that discussing it is much quicker than writing it down.

Discussion can raise far more points than can a single written solution and many students fail their ACCA exams in this sort of subject because they cannot think of sufficient points.

Explaining their thinking to other students helps them to develop effective communication.

Hearing about topics in the context of the different work experiences of other students shows them ways to apply knowledge to unfamiliar contexts in the exam.

Facilitating discussion Learning Examples can be done in several ways and changing the approach provides variety for students.

Open class discussion. Set the Learning Example and then throw it open to the class for discussion. It helps if you note down salient contributions on the board/screen. A key tutor skill here is the ability to listen to what the student says and to develop, articulate or clarify what they mean without appearing to suggest their contribution is inadequate. Praising them and saying so to capture that in a quick note and writing it down in a clearer way is effective. The problem with this approach is that some students wont contribute because you, the tutor, already know the answer or because they are too shy to do so. Generally speaking, open class discussions are most effective with small class sizes.

Small group discussion. Break the class into groups of four or five and set the Learning Example to each to discuss. Discussion will be better if a time limit is set for the exercise and they are told that they have to appoint someone to read out what they decide - the person appointed to speak will ensure the discussion progresses. You should circulate around the groups after a few minutes and discreetly listen to what is being said. Stir the pot with comments to a group, or to the room at large, such as one group had an interesting idea or some of you are taking a very interesting approach to this before contributing something to help them (whether or not any group had actually come up with it themselves). Asking students to prepare and give elaborate presentations on their findings tends to alienate students; they see it as a waste of time because the ACCA does not assess students using presentations.

Web icon

These denote Learning Examples that require students to research from the Internet. They are used very sparingly because it may be difficult for colleges to assure Internet access for classes of students, but they can sometimes be set for homework.

Introduction ix

Teaching session planners

Our planners are based on 90-minute sessions this really is as long as you can expect your students to concentrate without a break over two types of course.

A condensed three day course (so 12 sessions) A full-length six-day course (so 24 sessions) Obviously your course might be structured differently but you should be able to adapt the planners we have provided as necessary.

Condensed course

Session Chapters Learning examples Additional materials

1 1 and 2 1.1 to 2.6 Study text question bank questions 1 to 3

2 3 and 4 3.1 to 4.4 Study text question bank questions 4 and 5



5 9 9.1 to 9.10 Study text question bank questions 12 to 14

6 10, 11 and 12 10.1 to 12.27 Study text question bank questions 15 to 19

7 13, 14 and 15 13.1 to 15.3 Study text question bank questions 20 to 24 and 45

8 16, 17 and 18 16.1 to 18.6 Study text question bank questions 25 to 29

9 19, 20 and 21 19.1 to 21.4 Study text question bank question 30 to 34

10 22 and 23 22.1 and 23.3 Study text question bank questions 35 to 37

11 24 and 25 24.1 and 25.2 Study text question bank questions 38, 39 and 44


x

Standard course


1 1 and 2 1.1 to 2.1 Study text question bank question 1

2 2 2.2 to 2.6 Study text question bank question 2 and 3

3 3 and 4 3.1 to 4.4 Study text question bank questions 4 and 5

4 5 5.1 to 5.5 Study text question bank questions 6 and 7

5 6 6.1 to 6.4 Study text question bank question 8






11 12 12.1 and 12.2 Study text question bank questions 18 and 19


13 14 and 15 14.1 to 15.4 Study text question bank question 21 and 22

14 16 and 17 16.1 to 17.4 Study text question bank questions 25, 26 and 27


Introduction xi



17 20 20.1 Study text question bank questions 31 and 32


19 22 22.1 and 22.2 Study text question bank question 35

20 23 23.1 and 23.2 Study text question bank questions 36 and 37


22 25 25.1 and 25.2 Study text question bank question 39 and 44

23 26 26.1 and 26.5 Study text question bank question 40

24 27 27.1 to 27.3 Study text question bank questions 41 to 43

1

chapter 1

INTRODUCTION TO THE UK TAX SYSTEM

This chapter contains background knowledge which underpins the whole of your later studies of taxation.

THE OVERALL FUNCTION AND PURPOSE OF TAXATION IN A MODERN ECONOMY X

DIFFERENT TYPES OF TAXES X

PRINCIPAL SOURCES OF REVENUE LAW AND PRACTICE X

TAX AVOIDANCE AND TAX EVASION X

2

Tax avoidance and tax evasion

Principal sources ofrevenue law and practice

Different types of taxes

The overall function and purpose of taxation in a modern economy

Economic factorsTaxation represents a withdrawal from the UK economy. Tax policies can be used to encourage anddiscourage certain types of activity.

saving charitable donations entrepreneurs investment in plant and machinery

Encourages

smoking alcohol motoring

Discourages

Social factorsTax policies can be used to redistribute wealth Direct taxes tax only those who have these resources Indirect taxes discourage spending Progressive taxes target those who can afford to pay

Environmental factorsTaxes may be levied for environmentalreasons Climate change levy Landfill tax

TH

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ALL F

UN

CTIO

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ND

PU

RPO

SE O

F T

AXATIO

N IN

A M

OD

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N E

CO

NO

MY

Policies adopted depend on the tax concerned

Tax policies increasingly reflect environmental concerns

Tax rules usually change annually and are published in the Finance Act

1: Introduction to the UK tax system 3

Context

When a government is setting its taxation policies it will consider various factors.

Key learning points Social, economic and environmental factors can influence tax policies. Environmental concerns are having an increasingly important impact on tax policies.

Learning example 1.1

Name the three factors that may affect the UK governments tax policies.

Solution 1.1

Economic Social Environmental

4

DIF

FER

EN

T T

YPES

OF T

AXES

Direct taxes are charged directly on income and other profits of the taxpayer

Indirectly charged on the consumer (ie customer) via a supplier

Some direct taxes are paid to HMRC on the taxpayers behalf, eg income tax on employment income is paid to HMRC by the employer directly from the employees salary


Context

There are a large number of taxes in the UK. Some are collected directly from the taxpayer, although often someone else actually pays the tax to HMRC, eg income tax and NIC on employment income is paid directly from the employees salary to HMRC by the employer. Others, such as VAT, are charged and collected by a middle man.

Key learning points

A direct tax is charged directly on income or profits. An indirect tax is charged indirectly, for example VAT is charged by a supplier on goods and services supplied to the consumer.


How would you explain the difference between a direct and an indirect tax?

Solution 1.2

A direct tax is collected directly by HMRC from the taxpayer, although some direct taxes are actually paid to HMRC by someone other than the taxpayer.

Indirect taxes, eg VAT, are charged by a supplier from a customer and then paid to HMRC.

6

HM Revenue and Customs

Structure of the UK Tax system





Treasury

Officers of Revenue and Customs Receivables management officers Revenue and Customs Prosecutions Office

Appeals heard by First Tier Tribunal (most cases) Upper Tribunal (complex cases)

Sources of revenue law and practice

StatuteStatutory instrument

Law

Statements of practiceExtra-statutory concessionsExplanatory leafletsBusiness economic notesRevenue and Customs BriefInternal Guidance (HMRC manuals) Working Together

Practice

PR

INC

IPAL S

OU

RC

ES

OF R

EVEN

UE L

AW

AN

D P

RAC

TIC

E

Usually, the most important tax statute (Act of Parliament) each year is the Finance Act.

HMRC publications do not have the force of law


Context

There are a number of sources of tax rules. Only some of them have the force of law, while others provide guidance, explanations and interpretations of existing law.

Key learning points

Acts of Parliament and Statutory Instruments are the legislative tax rules which are supplemented by case law.

HMRC give guidance on the legislative rules via Statements of Practice, Extra Statutory Concessions, Explanatory Leaflets etc


Which of the following have the force of law?

(a) Extra Statutory Concessions (b) Finance Act 2011 (c) Income Tax Act 2007 (d) HMRC manual on employment income (e) Statement of Practice (f) Case law

Solution 1.3

Items (b), (c) and (f)

8





Tax evasion Tax avoidance

Tax evasion consists of seeking to mislead HMRCby either:

Suppressing information, or

Providing deliberately false information.

Tax avoidance includes any legal method ofreducing your tax burden, eg

Using tax shelters, or

Participating in schemes designed to minimisetax.

LegalIllegal

TAX A

VO

IDAN

CE A

ND

TAX E

VAS

ION Taxpayers have an

obligation to disclose information about their tax affairs

May lead to criminal prosecution

Minimise tax bill using legitimate tax planning methods


Context

Taxpayers are allowed to organise their tax affairs in the most efficient way for themselves. However, they need to ensure that they stay within the law.

Key learning points

Tax evasion is deceiving HMRC, which can lead to criminal penalties. Tax avoidance (ie using loopholes in the law) is not illegal but HMRC often closes these

loopholes once they discover how they are being used to avoid paying tax!


Which of the following is a legitimate means of minimising a taxpayers tax liability?

(a) Tax avoidance (b) Tax evasion

Solution 1.4

Tax avoidance

10

Reinforcement

Study Text Chapter 1

Scan and note section 4 on tax avoidance and evasion. This is arguably the most examinable part of the chapter. Note particularly the material in section 4.4 on the need for an ethical and professional approach

Attempt Quick Quiz

11

chapter 2

THE COMPUTATION OF TAXABLE INCOME AND THE INCOME TAX LIABILITY

The computation of income tax is a key exam topic. This chapter deals with the income tax computation which draws together all of the taxpayers income. The following chapters will cover the rules for computing taxable income from each different source.

BASIC PRINCIPLES X

CHARGEABLE/EXEMPT INCOME X

DEDUCTIBLE INTEREST X

COMPUTING INCOME TAX X

JOINTLY HELD PROPERTY X

12

Personal allowanceIndividual aged < 65

7,475 for 2011/12

Restrict if adjusted net income > 100,000

by 1 for each 2 excess (nil if > 114,950).

Individual aged > 65

9,940 age 65-74 for 2011/1210,090 age 75+ for 2011/12

Restrict if adjusted net income > 24,000

by 1 for each 2 excess to minimum 7,475

(unless income > 100,000, thenrestrict as for standard allowance)

Aggregation of income

Jointly heldproperty

Deductibleinterest

Basicprinciples

Computingincome tax

Chargeable/Exempt income

A basic principle of income tax is the aggregation ofincome. All of an individuals income for a tax year isadded up in a personal tax computation as total income.

An individual who is resident in the UK is taxable on his worldwide income.

ResidentAn individual is resident in the UK if he:

Is present in the UK for 183 days or more, or

Makes visits to the UK averaging 91 days per year ormore over four consecutive years. Taxable income

Net income minus personal allowance.

Adjusted net income Net income less grossed up gift aid/personal pensioncontributions.

Net income Total income minus deductible interest and trade losses. Tax liability

The amount of tax charged on income.

Tax payableThe balance of the tax liability still to be paid.

BAS

IC P

RIN

CIP

LES

Put gross figures into the income tax computation

Count days if in the UK at midnight

Only interest paid on a limited number of loans qualifies as deductible interest (see later)

2: The computation of taxable income and the income tax liability 13

Context

The aim is to produce a neat and complete income tax computation in the exam. Dont forget the basics!

Key learning points

Always include gross figures in the income tax computation, ie inclusive of any income tax deducted when paid.

Learn to use the correct terminology. This is essential for making a good impression on the examiner.

The tax tables provided in the exam have some of the rates and allowances you will need. Learn where to find these figures and try to get a feel for whats on the tables when practising questions.

Topic tip

Question 1 will always be an income tax focused question. The income tax computation comes up every sitting. A common error students make is not including gross income in the computation.

Learning example 2.1 Kate (aged 35) has net income of 105,000 in 2011/12.

What is the personal allowance to which Kate is entitled in 2011/12?

Solution 2.1

Net income 105,000

Less: income limit (100,000) Excess 5,000 Standard personal allowance 7,475 Less: excess (2,500)

Adjusted personal allowance 4,975

14



Deductibleinterest

Basicprinciples

Computingincome tax

Exempt income

Types of income Income taxed at sourceThe main types of income for individuals are:

Profits of trades, professions and vocations

Income from employment and pensions

Property income

Savings and investment income, including interestand dividends

Many sorts of investment income are taxed at source:for every 100 of income, the individual only receives80 of interest or 90 of dividends from UK companies.The taxable income is both cases is 100, but credit isgiven for the tax suffered.

Premium bond prizes Income from Individual Savings Accounts (ISAs) Returns on National Savings Certificates

Leave exempt income out ofpersonal tax computations.

This applies to bank andbuilding society interest.

Tax credits ondividends can be offsetto reduce a tax bill butare never repaid to ataxpayer. Tax credits onother taxed income canbe repaid.

CH

AR

GEAB

LE/E

XEM

PT IN

CO

ME

Dont ignore exempt income. Tell the examiner that it is exempt!

Always include the gross amount in the computation.

Example: Bank interest of 80:

80 100/80 = 100 gross So, 20 tax must have been deducted when paid.


Context

It is important to distinguish between the different types of income and whether the income is even taxable or not.

Different rules and rates apply to the different types of income (as we shall see later).

Key learning points

You must be able to spot exempt income in the exam. Investment income will be interest and dividends in the exam. In the income tax computation, deduct dividend tax credits before any other tax credits as

they cannot create a refund, while other tax credits can.


Simon receives bank interest of 1,860 and building society interest of 3,420 during the year. He also received dividends of 810.

Show how much he should include for each type of income in his income tax computation and the tax credit for each, where relevant.

Solution 2.2

There are two types of income in the question, interest and dividends, which must be dealt with separately:

Type of income Gross figure for computation

Tax credit

Interest:

(1,860 + 3,420) 100/80

6,600

1,320

Dividends:

810 100/90

900

90

16


Deductibleinterest

Basicprinciples

Computingincome tax


Deductible interestInterest paid on a particular type of loan isdeducted from total income to compute netincome.

For purchase of an interest in a partnership, or For purchase of plant and machinery for

partnership (purchase must be by partner), or For purchase of plant and machinery for use in

employment (purchase must be by employee)

DED

UC

TIB

LE IN

TER

ES

T Deduct from: (i) Non-savings income, then (ii) Savings income, then (iii) Dividend income

These are the only loans on which interest is deductible in the income tax computation


Context

Total up all income from all sources first. Then see if any deductions are available. The only ones you will see in the exam are deductible interest and trading losses (see later).

Key learning points

Learn the types of loan where interest paid on it is deductible.

Topic tip

Use this easy mnemonic:

Partnership plant or machinery Interest in a partnership Employment plant or machinery

Plant or machinery is any asset used in a business (eg computer, tools, etc...)


Jonah, aged 45, recently became a partner and received partnership trading income of 47,000.

During the year he paid 10,750 of interest on his mortgage for his home and 800 interest on a loan he had taken out for funds he was required to provide to join the partnership.

He received no other income during the year.

What is his taxable income?

Solution 2.3

Partnership trading income 47,000 Total income 47,000 Less: deductible interest (800) Net income 46,200 Less: personal allowance (7,475) Taxable income 38,725

18

Computingincome tax


Deductibleinterest

Basicprinciples


If non-savings income does not exceed the starting rate limit, then the savings income is taxed at the startingrate (10%) up to the starting rate limit: 2,560 for 2011/12.

Total non-savings, savings and dividend income separately.

Deduct deductible interest, losses and the personal allowancefrom non-savings income first, then savings income thendividend income.

Tax non-savings income, then savings income, then dividendincome.

There is only one set of rate bands to cover alltypes of income.

Broadly interest

At 20%, 40% and 50%

At 10%, 20%, 40% and 50%

At 10%, 32.5% and 42.5%

Computing income tax1

2

3

The basic rate limit and higher rate limitmust be increased by the gross amount ofany gift aid donation/personal pensioncontribution (amount paid 100/80).

CO

MPU

TIN

G IN

CO

ME T

AX

Keep figures in three separate columns

Basic rate limit for 2011/12 = 35,000, higher rate limit for 2011/12 = 150,000

Gift Aid = cash donations to charity


Context

Once you have added all income together you need to be able to apply the correct tax rates. These depend on the type of income, non savings, savings or dividends, as different rates apply to each type.

Key learning points

Learning how to set out the income tax computation is essential: Non savings (NS) Savings (S) Dividends (D)

Total income X X X

Less: deductible interest/ losses

(X) (X) (X)

Net income X X X

Less: personal allowance (PA) (X) (X) (X)

Taxable income X X X

Tax @ 20%/ 40%/50% Tax @ 10 %/32.5%/42.5%

BUT if NS income < 2,560, tax savings income up to that amount @ 10% (savings rate)

Watch for gift aid donations (and personal pension contributions see later) which (both) increase the basic rate limit and the higher rate limit by the gross amount.

Tax payable is the tax calculated less tax deducted at source.


Following on from the example of Jonah (above), how much is his tax payable?

Solution 2.4 Taxable income 38,725 35,000 @ 20% 7,000 3,725 @ 40% 1,490 Tax payable 8,490


This example appears in the Question & Answer Bank at the back of these Notes.

Solution 2.5

This solution appears in the Question & Answer Bank at the back of these Notes.

20


Deductibleinterest

Basicprinciples

Computingincome tax


Jointly held propertySpouses and civil partners often hold propertyjointly, sometimes in unequal proportions.

For tax purposes treat the income received fromsuch property as shared equally.

If the actual interests in the property are unequal,spouses/civil partners can declare this to HMRCand income is then shared in actual proportions.

JO

INTLY H

ELD

PR

OPER

TY Civil partners are individuals of the same sex

who have signed the official civil partnership register

Asset producing the income is treated as owned equally, even if this is not, in reality, the case


Context

You may see a bank account held jointly in the exam. You need to know how to deal with any income (ie in this case, interest) received.

Key learning points

Split income 50:50 if received from assets (such as bank accounts, property, etc...) held jointly by spouses or civil partners.

This rule never applies to earned income (such as employment or trading income).


Mr and Mrs Smith receive interest of 12,000 from their bank account, which is held in both of their names. Mrs Smith has only put a few hundred pounds into the account since the account was set up as she does not work.

Mr Smith also receives the following income personally:

Salary of 60,000 (from which he gives his wife 500 a month towards housekeeping money) Dividends of 1,650 How much income should Mr Smith include in his income tax computation?

Solution 2.6

Mr Smith is taxable on all of his salary and dividends, but only on half of the bank interest. This is the case even though Mrs Smith has clearly not put half of the bank funds into the account.

Salary 60,000 Dividends: 1,650 100/90 1,833 Bank interest: 12,000 100/80 50% 7,500 Gross income for tax computation: 69,333

22

Reinforcement


Expand notes on the personal allowance, in particular the age allowance (para 6.2), and also on computing the tax payable (paras 7.1 7.3)

Attempt Quick Quiz Attempt all examples in the chapter and then attempt Question 1 (22 mins),

Question 2 (27 mins) and Question 3 (27 mins) in the exam question bank Read the article Finance Act 2011 written, in part, by the Paper F6 examiner,

David Harrowven, on the ACCA website at:

http://www.accaglobal.com/pubs/students/publications/student_accountant/archive/sa_sept11_FA2011.pdf

David Harrowven has repeatedly said that it is vital that students read his Finance Act article.

23

chapter 3

EMPLOYMENT INCOME

Although this exam is mainly computational you may be asked to describe the difference between employment and self-employment.

You also need to be aware of the final two topics in this chapter: when employment income is assessed and the deductions that you may be able to make in computing the amount of assessable employment income.

EMPLOYMENT AND SELF-EMPLOYMENT X

BASIS OF ASSESSMENT X

ALLOWABLE DEDUCTIONS X

24

Allowabledeductions

Employment andself-employment

Basisof assessment

Whether a contract is a contract of service or acontract for services will depend on a number offactors.

Employed or self-employed

An employee works under a contract of service anda self-employed person under a contract for services.

The degree of control exercised over theperson doing the work

Whether he must accept further work Whether the other party must provide further work Whether he provides his own equipment Whether entitled to benefits eg pension Whether he hires his own helpers What degree of financial risk he takes What degree of responsibility for investment

and management he has Whether he can profit from sound management Whether he can work when he chooses The wording used in any agreement between

parties

Factors

EM

PLO

YM

EN

T A

ND

SELF-E

MPLO

YM

EN

T

Employment income is taxable as earnings while self employment profits are taxable as trading income

Taxpayers usually prefer self employment as they can deduct more expenses from their income, so they pay less tax, and they do not have to pay tax each month via the PAYE system (see later)

Look at all the factors to decide whether individual is an employee or self employed.

Workers status also affects NICs payable lower rates apply to the self employed

3: Employment income 25

Context

Employment income and trading income are calculated using different rules. It is therefore essential to determine whether an individual is employed or self employed.

Key learning points

HMRC look at all the factors to decide whether an individual is employed or self employed. Do the scales tip more in one direction or the other? It is not a black and white decision but

instead depends on the facts of each individual case.

Most individuals prefer to be treated as a self employed individual rather than an employee, because both their income tax and their NIC bill will be lower.

The question of whether someone is employed or self-employed is always a topical area and could appear as a written element of a longer question. It will not be a question of its own.


Jeremy has a 6 month contract with YouKnow Plc providing consultancy services.

He works on their premises from Monday to Friday but provides his own laptop.

He does not receive sickness or holiday pay. Jeremy is paid a monthly amount for his services.

Is Jeremy likely to be treated as an employee of YouKnow Plc or as self employed?

Solution 3.1

Factors pointing towards employment:

Works on clients premises Paid monthly amount Factors pointing towards self employment:

Short term contract Provides own equipment (laptop) Does not receive sickness or holiday pay Conclusion: Jeremy is likely to be treated as self employed

Web

http://www.hmrc.gov.uk/employment-status/index.htm

26

Allowabledeductions


Basisof assessment

Earnings are taxed in the year in which they arereceived.

Employees/directors are taxed on income fromthe employment: cash earnings benefits

Employment income

The general definition of the date of receipt isthe earlier of: the time payment is made the time entitlement to payment arises

Directors are deemed to receive earnings on the earliestof the following: the time given by the above general rule the time the amount is credited in the companys

accounting records the end of the companys period of account (if the

amount has been determined by then) when the amount is determined, if this after the end

of the companys period of account

BAS

IS O

F A

SS

ES

SM

EN

TNeed to calculate the cash equivalent of any non-cash benefits (see later)

Earnings include salary, wages, tips broadly anything received as a reward for employment

Receipts basis ie received in the tax year (ie 6 April to 5 April)

Special rules for directors


Context

We must determine exactly when earnings are received so that we only tax earnings received in the tax year.

Key learning points

Only tax earnings received in the tax year. Watch for dates in the question if the earnings are not received in the relevant tax year do

not include them.

Earnings include both cash (eg salary/tips) and non-cash benefits (see the next chapter).

Topic tip

Earnings tested as part of Question 1 in the December 2008, June 2009, December 2009, December 2010 and June 2011 exams.

In the exam could be asked to calculate the employment income figure and then slot it into the correct place in the income tax computation.

Could look back now to remind themselves where it goes?


Stephanie receives an annual salary of 32,000.

Stephanie has the use of a company car. Her employers payroll department has advised her that the cash equivalent of the company car benefit is 1,275.

She also received the following performance related bonuses:

15 July 2010 5,500 15 January 2011 2,800 15 July 2011 6,200 15 January 2012 850 What are her earnings for 2011/12?

Solution 3.2

Earnings: Salary 32,000 Car benefit 1,275 Bonus received in 2011/12:

15.7.11 6,200 15.1.12 850

Total 40,325

28

Allowabledeductions


Basisof assessment

Expenses specifically deductible against earnings:Insurance premiums to cover directors and employeesliabilities (and payments to meet those liabilities)Subscriptions to relevant professional bodiesQualifying travel expenses costs the employee incurstravelling in the performance of his duties or/and travellingto or from a place attended in the performance of dutiesContributions (within limits) to a registered occupationalpension schemePayments to charity under a payroll deductionscheme

1

2

3

4

5

Exam focusIf you have to decide whether an expenseis deductible, put yourself in HMRCsposition and try to find an argumentagainst deducting it. If you can find aspecific argument, the expense is probablynot deductible.

The strictness of this test has beenemphasised in many cases

The general rule is that expenses can only be deducted fromearnings if they are incurred wholly, exclusively and necessarily

in performing the duties of the employment. Normal commuting does not qualify Relief is available for expenses incurred by an

employee working at a temporary location ona secondment of 24 months or less

If a mileage allowance is paid relief isavailable for any shortfall of allowance actuallypaid over statutory mileage allowance

ALLO

WAB

LE D

ED

UC

TIO

NS

Learn the terminology (wholly, exclusively and necessarily)

It is extremely difficult to deduct expenses from employment income

Both pension contributions and charitable giving payments are deducted by the employer from pre-tax salary

Mileage allowance for use of OWN car:

Up to 10,000 business miles: @ 45p per mile Miles over 10,000: @ 25p per mile

Taxable if paid over these rates (in tax rates and allowances)

Expenses of travelling from home to a client are only deductible if the journey is substantially different from normal commute


Context

Employees can only deduct expenses in very limited circumstances, which is one of the reasons why individuals prefer to be treated as self employed where possible. Where a deduction is possible, the employees employment income figure in the tax computation is reduced.

Topic tip

Must understand how limited the opportunities are for an employee to obtain a deduction for their expenses.

Case names are given in the Study Text these do not need to be learnt. Distinguish between company cars (taxable benefit next chapter) and mileage

allowance (use of own car).


Sylvia is employed as a bookkeeper by Grant Ltd. She has the following expenses:

Annual membership dues (International Association of Bookkeepers) 250 New suit for work 180 Occupational pension contribution 360 Commuting costs 1,500 Travel to clients 95

What are the total expenses that can Sylvia deduct from her employment income?

Solution 3.3

Sylvias deductible expenses are:

International Association of Bookkeepers membership dues 250 Occupational pension contribution 360 Travel to clients 95 Total 705

The cost of clothes for work is not deductible (except for certain trades). Commuting costs are usually not deductible. Other expenses are deductible only if they are incurred wholly, exclusively and necessarily in performing the duties of the employment.

30

Reinforcement


Expand notes on travel expenses (para 3.2), other expenses (para 3.3) and mileage allowances (section 4)

Attempt Quick Quiz Work through all the questions in the chapter and then attempt Question 4 in

the exam question bank (27 mins). Although the focus in the exam is on computational questions, written questions may still come up as part of a longer question.

31

chapter 4

TAXABLE AND EXEMPT BENEFITS. THE PAYE SYSTEM

Benefits are often examined so it is vital that you are able to calculate the taxable value of benefits provided to employees. You also need to be aware of the benefits that are exempt from tax.

The deduction of tax from employment income through the PAYE system is less frequently examined, but it is still important.

TAXABLE BENEFITS X

EXEMPT BENEFITS X

THE PAYE SYSTEM X

32

Meal vouchers exemptup to 15p per dayVouchersGeneral business expenses

The PAYE system

Exemptbenefits

Taxablebenefits

Taxed on most employeesExcept excluded employees (earn lessthan 8,500 p.a. and not director) onlytaxable on certain benefits

P11D employees are employees who arenot excluded employees.

Cash vouchers Credit token Non-cash vouchersTaxable on all employees (cost of providing benefit)

Reimbursed expenses taxable onemployees (not excluded employees).May make deduction claim.

Non-cash benefits

including excluded employees.

TAXAB

LE B

EN

EFIT

SInclude value of any expenses reimbursed to P11D employees then deduct the amount incurred wholly, exclusively & necessarily.

So, if an employee pays 100 of business expenses which his employer then reimburses, include the 100 in employment income then show it as a deduction.

A P11D is the form the employer uses to report the benefits to HMRC

Vouchers and accommodation are taxable on both excluded and P11D employees

Living expenses are not taxable on excluded employees

Job related: Necessary Customary Security

4: Taxable and exempt benefits. The PAYE system 33

Context

Whenever an employer provides something other than cash to an employee you need to think about whether there is a taxable benefit. While P11D employees are taxable on any benefit they receive, apart from certain exempt benefits (see next section), excluded employees are generally only taxable on vouchers (which include credit cards) and living accommodation provided by their employer.

Key learning points

Must distinguish between P11D and excluded (ie earnings < 8,500) employees. Vouchers: The 15p exempt meal vouchers (sometimes called luncheon vouchers) are an

example of an exempt benefit (covered in the next section). Do not ignore exempt benefits in the exam tell the examiner they are exempt: this may earn a mark!

Accommodation benefit: Did the property cost (including improvements before start of current tax year) more than 75,000? If so will need to calculate two elements of the accommodation benefit: the basic and additional benefit.

Topic tip

Employment benefits were tested in Question 1 of the December 2010 exam. Official rate of interest (for additional accommodation benefit) is given in the exam in the

tax tables.

Students often miss the point that if an employee pays rent to the employer for living accommodation this rent reduces the taxable benefit.

Check dates given in the question: time apportionment is crucial if the benefit has only been available for part of the tax year.


Harvey is provided with a house by his employer, who had acquired the house at a cost of 130,000 on 1 April 2005 and spent 10,000 on extending the property on 1 September 2008. Harvey moved into the property on 1 July 2008.

The annual value of the house for 2011/12 is 3,250. Harvey pays rent of 300 each month to his employer for the use of the house.

What is Harveys total benefit in respect of the house for 2011/12?

Solution 4.1 Basic charge: Annual value 3,250 Less: contribution (rent) (3,250) Nil Additional charge: Cost + improvements before 6.4.11 (130,000 + 10,000) 140,000 Less: limit (75,000) 65,000 65,000 @ 4% 2,600 Less: rest of rent: (300 12) - 3,250 (350) Taxable benefit 2,250

34

Loans Cars

The PAYE system

Exemptbenefits

Taxablebenefits

Annual taxable benefit for the private use of a car is (price of car capital contributions) %.

Cars emitting 75g/km or less = 5% Cars emitting CO2 between 76120g/km = 10%. Cars emitting between 121125g/km = 15%. Percentage

increases by 1% for each 5g/km (rounded down) up to 35%. Percentage increased by 3% for diesel engined cars (not

above max 35%). Benefit scaled down on a time basis, if car not available all

year. Benefit then reduced by any contribution by employee forprivate use.

Fuel for private use is charged as percentage of base figure(18,800, 2011/12). Same percentage as car benefit. Noreduction for partial reimbursement by the employee.

Loans of over 5,000 giverise to taxable benefits equalto the difference between theactual interest and interest atthe official rate.

A write-off of a loan gives riseto a taxable benefit equal tothe amount written off.

1

2

Only taxed onP11D employees

Other benefits

In general, if an asset is made available for private use, theannual taxable benefit is 20% of the market value when theasset was first provided, less any employee contribution.

If the asset is subsequently givento the employee the taxablebenefit is the higher of:(i) original MV less amounts

already taxed(ii) market value at date of giftless any employee contribution.

Taxable value of other benefits charged onemployees other than excluded employees

Excluded employees taxed only on second-handvalue as cash earnings

Cost of provision of benefit less anyamount made good by employee

Not used if asset is bicycle

Private use of asset

TAXAB

LE B

EN

EFIT

S Compare the average and strict methods of calculating the loan

The provision of a pool car (ie a car available to all employees on an occasional basis) is an exempt benefit

Only includes any additional (or marginal) cost for the employer, eg private school fees for member of staffs child will only be the additional cost for that child (eg school dinners, etc...)

Only a taxable benefit for P11D employees

The fuel benefit is an all or nothing benefit, ie either taxable in full or not at all (if all private fuel is reimbursed to the employer)

If no second hand value, no benefit!


Context

The general rule is that the value of the benefit to include in the employees employment income is the cost to the employer (or second hand value for excluded employees). However, there are specific rules for certain assets, which, of course, are the most examinable!

Key learning points

All benefits must be time apportioned if they are only available for part of the tax year. In general, any contributions by an employee can be deducted from the taxable benefit

figure.

One exception to this rule is in relation to private fuel.

Topic tip

Steps to follow where there is both time apportionment and an employee contribution: (1) Calculate the full benefit using rules learnt (2) Time apportion (Note. Special 30 day rule for cars) (3) Deduct employee contribution

Must be able to calculate taxable benefits quickly and correctly in the exam and feed them into the income tax computation as part of the total employment income figure.

Benefits will usually be examined in an employment income question. They were tested as part of Question 1 in both the June 2009 and December 2010 exams.


Keith has a company car (list price 25,000) throughout the tax year. The car has CO2 emissions of 188g/km. His employer pays for all of his private diesel.

What is Keiths total taxable benefit?

Solution 4.2 Car benefit:

185 1255

+ 15 + 3 (diesel)= 30%

25,000 30% 7,500 Fuel benefit: 18,800 30% 5,640 Total benefit 13,140


This example appears in the Question & Answer Bank at the back of these Notes.

Solution 4.3

This solution appears in the Question & Answer Bank at the back of these Notes.

36

The PAYE system

Exemptbenefits

Taxablebenefits

Exempt benefitsLoans of up to 5,000

Meal vouchers of up to 15p per day

Entertainment and gifts provided by a third party for an employeeby reason of his employment

Long service awards of up to 50 per year of service

Job related accommodation

Workplace nurseries

Other childcare provided by employer

Recreational/sporting facilities available to employees generally

Works buses and mini-buses

Bicycles provided for cycling to work

Parking places at or near work

The cost of gifts from any one sourcemust not exceed 250 per tax year

The award must be a non-cash award andthe employee must have worked at least20 years

Limited to 55/28/22 per week forbasic/higher/additional rate employee

A minibus must have a seating capacity of9 or more. A works bus must have aseating capacity of 12 or more

EXEM

PT B

EN

EFIT

SYou must learn to spot exempt benefits and tell the examiner when you do for an easy mark

Personal incidental expenses (PIEs):

UK 5 per night Overseas 10 per night

If exceeds these limits, the whole amount is taxable

Can claim more than 3 per week (tax free) with supporting evidence


Context

Employers can provide certain benefits to their employees with no tax (or NIC) consequences for the employee. These are clearly a valuable part of an employees remuneration package.

Key learning points

The examiner often puts an exempt benefit in an employment income question. Do not miss the easy mark for spotting it and telling the examiner

There is no easy way to spot an exempt benefit simply have to learn them!


Which of the following are exempt benefits?

(a) Mileage allowance paid at 55p per business mile (b) Staff party cost 50 per head (c) Car parking space at work (d) 5,000 removal expenses (e) Private medical insurance

Solution 4.4

(a) The first 45p of the mileage allowance is exempt. 10p per business mile is a taxable benefit

(b) Staff party is exempt so long as below 150 per head

(c) Car parking space at work is exempt

(d) Removal expenses are exempt up to 8,000

(e) Private medical insurance is only an exempt benefit if it is paid in respect of an employee who is working abroad.

38

The PAYE system

Exemptbenefits

Taxablebenefits

The PAYE system collects tax from employees each payday, with the intention that over a tax year, the correcttotal of tax due will be collected.

Routine each payday Add the gross pay to the running total of gross

pay for the tax year Use the employees PAYE code to work out the

amount of cumulative gross pay which is tax free Compute tax on the balance Deduct the tax already paid. The difference is the

tax to deduct on this payday

The employer must pay over the tax deducted upto the 5th of each month by the 19th of the month.

PAYE code numbers

Year end returns

Quarterly payment is allowed if the averagemonthly total of tax and NICs is less than 1,500

PAYE settlement agreements are arrangements underwhich employers settle employees income tax liabilitieson certain benefits and expense payments.

L: Code with basic personal allowanceP: Code with age 65-74 allowancesY: Code with age 75+ allowance

Following the year end the employer must submit:Form P14Form P35Form P11D/P9D by 6 July

By 19 May}

Payment

PAYE settlement agreements

TH

E P

AYE S

YS

TEM PAYE is not a separate tax it is simply the system

used to collect the correct amount of tax (and NIC) from an employees pay.

Tax is collected via PAYE on

Cash payments Shares Other traded assets (eg

gold, coffee, etc...)

P14 Tax (and NIC) figures for each individual employee

P35 Summary of above figures for all employees

P11D Benefits and expenses for each individual employee

PSAs can be used where the expense or benefit is minor or irregular or where it would be impractical to operate PAYE

The value of taxable benefits can be included in an employees PAYE code so that the PAYE system is effectively used to collect tax on those benefits

Front PagesContents & Introduction1 Introduction to the UK Tax System2 The Computation of Taxable Income and the Income Tax Liability3 Employment Income4 Taxable and Exempt benefits. The PAYE System5 Pensions6 Property Income7 Computing Trading Income8 Capital Allowances9 Assessable Trading Income10 Trading Losses11 Partnerships and Limited Liability Partnerships12 National Insurance Contributions13 Computing Chargeable Gains14 Chattels and the Principal Private Residence Exemption15 Business Reliefs16 Shares and Securities17 Self-Assessment and Payment of Tax by Individuals18 Inheritance Tax19 Taxable Total Profits20 Computing the Corporation Tax Liability21 Chargeable Gains for Companies22 Losses23 Groups24 Overseas Matters for Companies25 Self-Assessment and Payment of Tax by Companies26 An Introduction to VAT27 Further Aspects of VATQuestion & Answer BankEnd Page

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