The new Study Notes are prepared using Finance Act (FA) 2021 which are relevant in personal tax for the Tax Year 2021/22 and in corporate tax for Financial Year (FY) 2021 and will be used for TX-UK examinations from June 2022 through to March 2023.
The lectures currently available online are those used for examinations based on FA 2020 (relevant for exams up to March 2022), which are themselves a combination of lectures that were newly recorded for FA 2020 plus lectures from earlier years where the rules had not changed.
The purpose of this note is to assist those students who wish to start their studies for the June 2022 examinations with access to lectures before the new FA 2021 recordings become available. You must use the new FA 2021 Study Notes in conjunction with the old lectures subject to the comments made below for each chapter.
Any students who unfortunately need to resit the TX-UK examination or who deferred from the March 2022 sitting to the June 2022 sitting and who are therefore familiar with the FA 2020 rules, should use the Finance Act 2021 ACCA Technical Article available on the ACCA website before using the relevant chapters of the new Study Notes to be aware of where changes have occurred between the old FA 2020 material previously used and the new FA 2021 Study Notes.
Chapter 2
This is a huge chapter that demonstrates how to prepare the income tax computation of the taxpayer for the Tax Year and there have been no changes to the rules that continue to apply in FA 2021.
The changes that you will see in the FA 2021 Study Notes apply simply to some of the rates and allowances of the tax year and are as follows:
- The Personal Allowance (PA) has increased from £12,500 for FA 2020, to £12,570 in FA 2021. The PA is the level of tax free income that most UK taxpayers are entitled to – see note 3 below on restriction of PA.
- The basic rate of taxation (20%) limit of £37,500 (FA 2020) of taxable income has increased to £37,700 in FA 2021.
- The level of “adjusted net income” at which the PA will be entirely removed from the taxpayer has increased from £125,000 in FA 2020 to £125,140 in FA 2021 (see Section 4 of the Study Notes).
- The transferable amount of the PA dealt with in Section 4.1 of the Study Notes has changed from £1,250 in FA 2020 to £1,260 in FA 2021.
The changes in points 1 and 2 above will result in slightly different figures of “Taxable Income” and “Tax Liability” in each of the Examples given in Chapter 2. You may watch the old lectures but in conjunction with these, you must here and for every chapter use the revised FA 2021 Study Notes for your studies and when you work the examples.
The examples in the new Study Notes will clearly deal with the 2021/22 tax year whereas the examples in the lectures will be for the 2020/21 (and earlier) tax year where the old rates and allowances applied. The old lectures will show the process of preparing the tax computations which has not changed but with the new Study Notes that use the revised figures as stated above.
Chapter 3
There have been no changes in the rules that apply to property income and ISA’s so apart from noting date changes in examples the new Study Notes may be used in conjunction with the old lectures.
Chapter 4
Only one change here, the disallowance of 15% of lease hire costs on motor cars now applies to cars with CO2 emissions exceeding 50 gm / km instead of 110 gm / km. The rules for adjustment of trading profits have otherwise remained the same so the new Study Notes may be used with the old lectures but noting changes in dates used in example.
Chapter 5
The CO2 emission levels of motor cars used to determine the capital allowances available have changed:
Only new electric-powered motor cars with zero CO2 emissions now qualify for the 100% first-year allowance. Previously, new motor cars with CO2 emissions below 50 grams per kilometre qualified.
The CO2 emissions limit to qualify for writing-down allowances at the rate of 18% has been reduced from 110 gm per km to 50 grams per kilometre.
With these issues noted you should be able to use the new Study Notes with the old lectures.
Chapter 6
The bases of assessment for unincorporated traders have not changed and the new Study Notes may be used with the old lectures apart from on Example 6 where just the new Study Notes should be used where the 2021/22 rates and allowances now apply.
Chapter 7
The rules that apply to the loss reliefs and the way that they are examined have not changed, but again you will see differences in dates when you work some of the examples and illustrations. This should not prevent you from using the new Study Notes while watching the old lectures.
Chapter 8
The rules that apply to the taxation of partners within a partnership and the division of profits and losses of a partnership between the partners have not changed. The only differences between the new Study Notes and old lectures are changes in the dates of some of the accounting periods.
Chapter 9
There have been increases to the % used in computing the car benefit assessments on employees and in the figures for the car fuel benefit, the van and van fuel benefit. The official rate of interest in 2021/22 is 2% and is used in the new Study Notes. Recognising these differences you should still be able to combine the use of the old lectures with the new Study Notes but ensure that you work the examples and review the answers in the new Study Notes.
Chapter 10
No changes for the rules on pension contributions but note the different dates and tax years used in some of the illustrations and examples in the Study Notes as compared to the old lectures.
Chapter 11
Although the principles have not changed, the thresholds used for the different classes of NIC have changed meaning that all the examples will have different answers computed. As most of the work in this small chapter is computational using these thresholds then I would advise just using the Study Notes while waiting for the new lectures to be recorded.
Chapter 12
No changes for the CGT rules, rates and AEA used, but as the income tax basic rate band limit has increased to £37,700 the calculations of the CGT liabilities in the relevant examples which use this limit will be slightly different in the new notes as compared to the old lectures and again the dates used in the examples may differ.
Chapter 13
The rules for dealing with the disposal of shares have not changed so again the only differences to be found between the new study notes and the old lectures will be the dates of some of the share transactions.
Chapter 14
The term “gift relief” has been replaced by the term “gift holdover relief”. No changes in the rules that apply for the reliefs examined, so just the usual updating of transaction dates in examples.
Chapters 15 & 23
There are no lectures for the administration chapters but in the Study Notes the interest rate on late payments of tax has been changed to 2.6% and it is now the 2021/22 tax year that is relevant.
Chapter 16
There have been no changes to the corporation tax rate or profit limit but there have been significant changes to the capital allowances now available to companies as compared to the rules that applied under FA 2020.It would be advisable therefore to ignore the part of the lecture that deals with capital allowances for companies and focus on the updated study note.
The term “accounting date” when referring to the date to which a company prepares its accounts, has now been replaced by “accounting reference date”.
Chapter 17
No changes in the rules for dividing a long period of account into 2 accounting periods, but again the dates in the example used have been amended and the capital allowances computation uses the new enhanced capital allowances system available to companies.
Chapter 18
There have been no changes to the loss relief rules that continue to apply in the TX-UK paper and only changes in the dates used in the material will exist between the old lectures and the new Study Notes
Chapter 19
No changes in the rules that deal with disposals of assets by companies. Only difference arising between new Study Notes and old lectures are the dates of transactions.
Chapter 20
No changes in rules and again the only difference in study materials is the date of transactions in some of the examples.
Chapter 21
No changes in rules and again the only difference in the study materials is the date of transactions in some of the examples.
Chapter 22
No changes in rules and again the only difference in the study materials is the date of transactions in some of the examples.
Chapter 24
No changes to the IHT rules but note the different dates used in some of the illustrations and examples.
Chapter 25
The departure of the UK from the EU has simplified the VAT rules that apply to exports and imports – do not use the old lectures on “UK businesses trading within and outside the EU”.
No changes to the other VAT rules but note the different dates used in some of the illustrations and examples.
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