Nature of the ACCA TX
The syllabus for ACCA Paper TX, Taxation, introduces candidates to the subject of taxation and provides the core knowledge of the underlying principles and major technical areas of taxation as they affect the activities of individuals and businesses.
The syllabus then considers the separate taxes that an accountant would need to have a detailed knowledge of, such as income tax from self-employment, employment and investments, the corporation tax liability of individual companies and groups of companies, the national insurance contribution liabilities of both employed and self employed persons, the value added tax liability of businesses, the chargeable gains arising on disposals of investments by both individuals and companies, and the inheritance tax liability of individuals.
Having covered the core areas of the basic taxes, candidates should be able to compute tax liabilities, explain the basis of their calculations, apply tax planning techniques for individuals and companies and identify the compliance issues for each major tax through a variety of business and personal scenarios and situations.
Structure of the ACCA TX paper
The paper will be predominantly computational and will have five questions, all of which will be compulsory.
• Question one will focus on income tax and question two will focus on corporation tax. The two questions will be for a total of 55 marks, with one of the questions being for 30 marks and the other being for 25 marks.
• Question three will focus on chargeable gains (either personal or corporate) and will be for 15 marks.
• Questions four and five will be on any area of the syllabus, can cover more than one topic and will respectively be for 15 marks.
There will always be a minimum of 10 marks on value added tax. These marks will normally be included within question one or question two, although there might be a separate question on value added tax.
National Insurance Contributions will not be examined as a separate question, but may be examined in any question involving income tax or corporation tax.
Emphasis of the ACCA TX exam
The exam will require you to prepare a computation for each of the main taxes correctly including the relevant items and in addition for businesses a Capital Allowances computation, Adjustment of profit statement will be required along with an understanding of the application of the VAT system to that business.
How to pass the ACCA TX exam
Use the Open Tuition ACCA TX lectures along with the TX Course Notes. Make sure that you are able to prepare the main computations, Income, Corporation and CGT including items on the correct basis and calculating correctly the relevant tax liabilities. You will also be required to prepare a Capital Allowances computation which format must again be known along with the rules required to prepare an Adjustment of profit statement for both an incorporated (company) and unincorporated (sole trader or partnership) business. The basic rules of VAT must also be known.
Once you have worked through the Course notes you should then read and work the excellent articles published by the TX Examiner.
When you are confident of a topic then practice as many past exam questions as you can using a Revision / Examination Question Bank supplied by an ACCA approved provider. This MUST be for the relevant Finance Act which for the March 2021 Examination is FA 2019. The past examination papers on the ACCA website should NOT be used for this purpose as the answers are in their original form and are not updated for changes in legislation and tax rates.
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