[teriki13]

I am aware it is kind of rare to ask questions like this but I wanted to cover all possible areas in F9.

Thanks for your help, Mr. Moffat.

[teriki13]

Thanks, sir. Can the same be done assets for which rollover relief is claimed?

I think you are right about confusing myself. It is just that going through the study texts and revision kit multiple times made F6 look easy and so I thought I might have gotten a false sense of confidence.

I thought if I can solve really difficult, unpredictable problems I might be able to boost my chances of passing this exam.

[teriki13]

All of the abover are deductible on an accruals basis? Should we calculate the amount of class 1 and 1A NIC for the portion of the tax year the employee is employed by a specific employer, or should we calculate them as the period of account as the basis?

Employer contributions to occ. pension schemes are deducted on a paid basis.

[teriki13]

Sir, shouldn’t we take into account whether this is the first year as a large company and whether augmented profits of £10 million has been exceeded or not (in this case, £10mil x 4/12=£3333333)?

Either sameed forgot to include those details or the question doesn’t mention them in that case the company had to pay quarterly installments in the previous year as well.

[teriki13]

Actually, what I meant was what amount of employee contributions to occupational pension schemes are deductible from gross employment income to calculate the amount of employment income to be assessed in the tax year. Should I deduct all of the employee occupational pension scheme paid during the tax year or only the amount that attracts tax relief?

I had all these questions a while back but I remembered to ask them now since I am quickly revising my notes.

[teriki13]

Basically, I can show the workings and main computation with proper markings (such as W1, W2) in any order as long as I start in a new page for both of them?

I should have asked these simple questions a lot sooner instead of putting them off until the last minute.

[teriki13]

Sir, what about employee contributions to occupational pension schemes? Should I deduct the amount attracting tax relief only to calculate employment income?

[teriki13]

I think it would be better if you did some simple revision. Anyways, all the best for tomorrow’s exam!

[teriki13]

I think you can still watch those lectures. I believe the only differences are the dates that are used in the video and the dates in the latest study notes.

F6 exam is tomorrow. Don’t you think it is bit too late to watch these lectures now?!

[teriki13]

You are right, I will not fail because of an individual very difficult MCQ. It’s just that, when it comes to exams, I want to aim very high and not take any risks.

Because when I aim for high 80s, I score somewhere in middle 70s.

Another reason I want to pass so badly is because I don’t want to study all over again if I fail.

[teriki13]

1) Thank you sir. Earlier I was looking for an example that would clarify my doubt but I couldn’t find it. I assume it is the same when calculating adjusted total income in regards to the cap on loss relief against general income?

2) Ah yes. How silly of me. I was really nervous that I wasn’t thinking straight.

Please tell me sir, I did all the questions in the revision kit and read the study text over and over again. But it still feels like the study text is not really preparing me for the exam as if ACCA will give an unpredictable question in the exam. Am I worrying too much or is this normal?

[teriki13]

Another doubt that I have, when calculating the adjusted income to determine the restriction of the annual allowance, do we add

1) Gross amounts of personal pension contributions PAID during the tax year, or
2) Gross amounts of personal pension contributions PAID THAT ATTRACTS TAX RELIEF (i.e. higher of £3600 or relevant earnings)

to the net income figure?

I am asking all this because I do not want to lose any marks over any silly mistakes.

[teriki13]

That is good to know. I was wondering about how anyone can finish the exam in time if the notes were necessary.

[teriki13]

Thank you. I pretty much knew that. I wanted to be certain because the question didn’t explicitly say the house was unusable. I tend to read through the questions really quickly (looking for figures and useful info) so it took me a while to realize the question described the house as “derelict”.

I don’t understand the last paragraph. I haven’t come across any question testing capital allowances that tests our knowledge of “usable” as well. So are you saying renovations that count as improvements qualify for capital allowances?

[teriki13]

So the answer is the same for both methods?

I was just asking because I am used to practicing the other way.

[teriki13]

That part made me confused a little bit. I was thinking that since earnings for NIC purposes are different, earnings for pension contributions may be confusing as well.

Thank you for clarifying. 🙂

[teriki13]

I just realised my mistake. There was no personal allowance deducted as adjusted net income clearly exceeds £122,000. Without the personal allowance, the taxable income is the same as the net income.

[teriki13]

So good to know the cap does not apply here. One thing less to worry about when doing the opening year loss relief calculations.

Also good to here examiners USUALLY test terminal loss in isolation.

Thank you for your help.

[teriki13]

Let’s say the loss is extremely big. We make the claim for the opening year loss relief (losses are set against the total income in the preceding 3 tax years). But there is still some loss left behind, can we then set it off against the total income in the year of the loss and then carry it forward? Also, does the cap against total income apply in the preceding 3 tax years?

I can calculate it and so set it off against the previous 3 years trading profits. However, I am still confused about how not all of the loss is not included in the terminal loss calculation.

From what I can understand regarding choice of reliefs, we should not make claims that results in personal allowances being wasted.

[teriki13]

Is the the motoring expense of £2800 deductible under the cash basis? Shouldn’t all expenditure on motor cars be replaced with the fixed rate mileage expense. Doesn’t that mean we have to deduct the £2800 from £20200 to get £17400 for cash expenses and then add the fixed rate mileage allowance of £2925 (6500 x 0.45).

That way the final answer should be £23175 [41000-(4000-1500)-17400-2925]

The reason for my confusion is that in the BPP study text, the motoring costs were not deducted under the cash basis in the example given.

Also, in the BPP revision kit, in Q81, the answer says the following:
“The running and capital costs of owning a motor car are replaced by the deduction based on statutory mileage allowances”

So, BPP is contradicting themself here. Any help would be greatly appreciated.

[teriki13]

I am curious about this too. Are you sure that’s the treatment for private when FYA applies?

[teriki13]

I know how to calculate the shadow price of labour in this question. But how do we calculate the additional hours that this shadow price is applicable for?

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