Use of ACCA Taxation TX-UK FA 2019 Lectures in preparation for the June 2021 Exam

Use of FA 2019 Lectures in preparation for the June 2021 Exam

In order to allow students immediate access to some lectures to use in conjunction with the newly published FA 2020 Study Notes, I have noted below how the current FA 2019 lectures may be used for this purpose where possible.

Students should firstly watch the Introductory lectures that give a basic understanding of the subject, the exam and the different taxes contained within the syllabus before then moving to the technical chapters to gain the detailed technical knowledge necessary to answer examination questions. Please note that towards the end of Introductory Lecture 2, I refer to the required material to be used in preparation for the June exam – as you will know the material to be used must be Finance Act (FA) 2020 and not the old Finance Act stated in this previously recorded lecture.

The lectures begin with Chapter 2 dealing with preparation of the Income Tax Computation and continue with income tax related issues through to Chapter 10.

Introduction – Part 1 – to the ACCA Taxation (TX-UK) Exam and the syllabus:

Introduction – Part 2 – to the ACCA Taxation (TX-UK) Exam

Chapter 2

There are no changes from FA 2019 to FA 2020 in either the rules for the computation of Taxable Income or the calculation of either the Income Tax Liability or Income Tax Payable figures, with the same rates and allowances as applied for the tax year 2019/20 continuing to apply in 2020/21.

Use the FA 2020 Study Notes in conjunction with the lectures and the only difference will be the change in the tax year from 2019/20 in lectures, to 2020/21 in the updated notes.

Within lectures 2.7 to 2.9 there is also reference to the use of lectures from both FA 2017 and FA 2018, again as NO changes to the issues dealt with in these lectures has taken place, they remain valid for this exam.

Chapter 3

There is just one technical change in FA 2020 which deals with Section 3 – Finance Expenses on Property Income. This issue has been simplified in 2020/21 as there is now only one treatment of such expenses compared to a dual exercise that was needed in 2019/20.

Follow the FA 2020 Study Notes here and ignore this part of the lectures – it is a simple treatment for our 2020/21 tax year – no finance expenses on property income will now be allowed as an expense to be deducted from property income in establishing the property income assessment – and tax relief for these expenses is now entirely given as a tax credit / reduction in the calculation of the income tax liability – as shown in the notes. This tax reduction being calculated as 20% (basic rate of tax) of the finance expenses figure.

Chapter 4

There are no changes to the adjustment of profit process with the only difference between the lectures and notes being the accounting period end date in the Study Notes compared to the one used in the older lecture.

Chapter 5

There are no changes in FA 2020 for the computation of capital allowances for Plant and Machinery and the only difference is that in the notes the dates used are 1 year later than the examples from FA 2019 used in the lectures. Please note that in the lecture that deals with Illustration 1, the FA 2019 notes being used had incorrectly given an accounting year ended 31 March but this was corrected in the lecture to the correct date of 31 December.

At the end of this chapter there is however a new section on a new introduction to the syllabus –  Structures and Buildings Allowance – there will be a new lecture recorded on this issue but the use of the FA 2020 Study Notes on this issue may be sufficient for some students while awaiting the lecture on this subject.

Chapter 6

The issues dealt with here are ones where no changes have occurred for many years in most cases and certainly no changes in rules since FA 2019 so the FA 2019 lectures may be used.

In Example 6 there is a requirement to prepare an income tax computation which in the lecture is again for 2019/20 whereas in the Study Notes it is of course for our tax year 2020/21. There are no differences however other than dates in relation to this example and answer.

Chapter 7

Although there are no changes in the rules that relate to loss reliefs, as some of these lectures pre date FA 2019 I would advise waiting until the new lectures are recorded and produced before studying this section as old rates and allowances are used in some of the examples in the lectures which may cause confusion for some.

Chapter 8 

Once again the rules used to divide the adjusted trading profit of a partnership between the partners have not changed but as some of the lectures here again pre date FA 2019 you may prefer to wait for the new lectures. The section on partnership losses should also not be attempted until you have firstly studied Chapter 7.

Chapter 9 

Some changes have taken place in this chapter on Employment Income for FA 2020, the only significant one being how to deal with company cars made available for the private use of employees and students should NOT use the FA 2019 lecture on this topic.

The assessable benefits for Vans and Heavier Commercial Vehicles have slightly increased so use the rates given in the Study Notes not in the lecture.

The official rate of interest that is used in computing certain other assessable benefits, the provision of living accommodation and beneficial loans, has also changed which will mean that the calculations shown in the lectures are now incorrect and only the FA 2020 notes should be used for these examples.

In Section 6 on Exempt Benefits the exempt amount for contributions made to employees in respect of additional costs incurred for working at home has been increased for 2020/21 as shown in the Study Notes.

Chapter 10

In Section 2 on the Annual Allowance the adjusted income figure used has been increased to £240,000 – again only use the figures given in the Study Notes not the out of date figures from the FA 2019 lectures.

This completes the work on income tax other than the administration chapter  – Chapter 15

Chapter 11

 This deals with National Insurance Contributions (NIC) and you should use the new FA 2020 lecture when this becomes available.

Chapters 12 – 14 deal with Capital Gains Tax (CGT)

Chapter 12

There are 3 main CGT differences between FA 2019 and FA 2020.

In Sections 1.4 and 1.5 of this chapter you are introduced to the Annual Exempt Amount (AEA) which is the CGT equivalent of the Personal Allowance seen in income tax. The FA 2019 AEA used in the lectures is £12,000 whereas for 2020/21 as seen in the Study Notes this is now £12,300 and this means that the answers to examples shown in the lectures are different due to the change in the AEA – use the FA 2020 Study Notes in conjunction with the FA 2019 lectures but note the use of the correct AEA in the notes as compared to the lectures.

In Section 1.7 of the Study Notes you will see reference to “Business Asset Disposal Relief” – this replaces “Entrepreneurs’ Relief” which is shown and discussed in the FA 2019 lectures. The change is mostly just a name change and the details of the relief are contained in Chapter 14 with only one substantive difference to be aware of, which is that the maximum lifetime limit is now £1m for Business Asset Disposal Relief as compared to a £10m limit for the old Entrepreneurs’ Relief.

Finally there is a new Section 7 detailing the new rules that require Payments on Account to be made in relation to gains made on the disposal of residential property – a new lecture will be recorded to deal with this issue.

Chapter 13

There are no changes to the treatment of the disposal of shares in FA 2020. So the FA 2020 notes should be used in conjunction with the FA 2019 lectures.

Chapter 14 

As stated in the note on Chapter 12 Entrepreneurs’ Relief has been replaced by the use of Business Asset Disposal Relief but the lecture on Entrepreneurs’ Relief may still be used in conjunction with the FA 2020 Study Note on Business Asset Disposal Relief with the only difference to note that the maximum lifetime limit has been reduced from £10m to £1m – for this reason the numbers used in Example 2 are much lower in the FA 2020 Study Notes than those used in the FA 2019 lecture – use the FA 2020 Study Notes example.

Section 5 deals with Private Residence Relief – previously known as Principal Private Residence Relief where one rule has changed creating a difference between the FA 2019 lecture and the FA 2020 Study Note – in Section 5.2 (a) the period of deemed occupation is now the last 9 months of ownership rather than the last 18 months of ownership – use the FA 2020 Study Notes.

Chapter 15

Self Study

Chapter 16 – 18

These chapters deal with Corporation Tax – there have been no changes in Corporation Tax since FA 2019.

Chapter 16

Although there are no changes in corporate tax in FA 2020, because that now there are no changes in the rate of corporation tax over the last 3 Financial Years, the section from the FA 2019 Study Notes and Lectures dealing with an Accounting Period straddling 2 Financial Years where the rate of corporation tax has changed is no longer relevant and has been removed thus simplifying the chapter. This section of the old FA 2019 lectures should therefore be ignored.

Chapter 17

No change to the rules on how to deal with a long period of account with the only difference between the old lecture and the new FA 2020 Study Notes being the accounting period end date used in Example 1.

Chapter 18

Although no changes have taken place since FA 2019 some of the lectures used go back to FA 2018 and include examples and notes where the change in corporation tax rates that had then occurred and which were examinable up until now, are no longer relevant from FA 2020.

You are therefore advised to NOT use these lectures and await the new FA 2020 lectures to be recorded.

Chapters 19 – 21 deal with the taxation of chargeable gains for companies

Although there have again been no changes in this area of the syllabus the lectures used in these chapters frequently go back to FA 2018. Students should not therefore use these lectures and again wait for the new lectures to be recorded and released.

Chapter 22

Once again as the lectures are old they will be replaced with new lectures.

Chapter 23

Self study

Chapter 24

As many of these lectures on Inheritance Tax are old, although few technical changes have occurred, new lectures will be recorded where those changes have taken place and therefore students should wait until the new lectures become available.

Chapter 25

These lectures will be newly recorded to replace the old lectures currently being used – please wait for new lectures to be released.