TX*** ACCA F6 June 2017 Exam was.. Instant Poll and comments ***

@huzaifa11 said: 1 You should assume that today’s date is 15 December 2016. Zhi has been self-employed since 2000, preparing accounts to 31 December. On 1 December 2016, Zhi purchased a new freehold warehouse for £164,000 for use in his business, but this purchase has resulted in Zhi having cash flow problems. He has various tax payments becoming due over the next two months, and would like to reduce or postpone these payments as much as possible. Income tax and national insurance contributions (NICs) Zhi’s income tax liabilities and class 4 NICs for the tax years 2014–15, 2015–16 and 2016–17 are, or are forecast to be: 2014–15 2015–16 2016–17 £ £ £ Income tax liability 25,200 27,600 18,000 Class 4 NICs 4,084 4,204 3,724 Zhi has not made any claims to reduce his payments on account. Capital gains tax (CGT) Zhi has a CGT liability of £12,980 becoming due for payment on 31 January 2017. This is in respect of a freehold office building which was sold for £210,000 on 10 December 2015, resulting in a chargeable gain of £76,000. The office building had always been used for business purposes by Zhi. Zhi is a higher rate taxpayer. No claim has been made for rollover relief. Value added tax (VAT) Zhi has forecast that he will have to pay VAT of £20,200 on 7 February 2017 to HM Revenue and Customs (HMRC) in respect of the VAT quarter ended 31 December 2016. On 12 December 2016, Zhi despatched goods relating to an exceptionally large credit sale of standard rated goods of £45,600 (inclusive of VAT). He has not yet issued a sales invoice for this sale. Because the customer is unlikely to pay until 28 February 2017, Zhi is considering not issuing a sales invoice until 1 February 2017. PAYE and NICs Zhi will have to pay PAYE and NICs of £5,724 electronically on 22 January 2017 to HMRC in respect of his two employees for the tax month running from 6 December 2016 to 5 January 2017. This includes amounts for bonuses which Zhi was planning to pay to his two employees on 1 January 2017, but could delay payment until 10 January 2017. The bonuses are in respect of the year ended 31 December 2016, and they will be treated as being received on whichever is the date of payment. The first employee has a gross annual salary of £20,000 and is to be paid a bonus of £1,500. The second employee has a gross annual salary of £55,000 and is to be paid a bonus of £5,000. 6 Required: (a) Calculate the amount by which Zhi can claim to reduce his self-assessment income tax and NICs due for payment on 31 January 2017 without incurring interest or penalties. (2 marks) (b) Calculate the amount by which Zhi’s CGT liability due for payment on 31 January 2017 will be reduced if he makes a claim for rollover relief based on the warehouse purchased on 1 December 2016 for £164,000. (3 marks) (c) Explain whether Zhi can reduce the amount of VAT payable on 7 February 2017 by not issuing a sales invoice for the credit sale of £45,600 until 1 February 2017, and, if so, by how much the payment will be reduced. (2 marks) (d) Calculate the amount by which Zhi’s PAYE and NICs due on 22 January 2017 will be reduced if he delays the payment of employee bonuses until 10 January 2017, and state when the postponed amount will be payable. Note: Your calculations should be based on annual income tax and NIC thresholds.

HEY< DO U HAV THE ANSWERS?

Hi, Question with residence status. Anyone remembers the question and answer. I know one of them was not a resident but I am not sure if the other one was. Did it actually said that the property they bought was their only property worldwide they owned ?

Hi. Does anyone remember the answer to qiestion in section B which asked to calculate input VAt recoverable on car purchase and expenses? What about the expense for the fuel? There was no info provided to calculate the output VAT...

@dicky123 said: Agreed, which is why the car in the main pool is disposed for £17,200 rather than £18,100.

"On disposal of the asset, a balancing adjustment is computed by deducting sale proceeds from the tax wdv (there is a balancing charge if sale proceeds exceed tax wdv, and a balancing allowance if sale proceeds are less than tax wdv). Having computed the balancing adjustment, the amount assessed or allowed is then reduced to the business proportion. A balancing allowance is then added in to the capital allowances of the period whereas a balancing charge will reduce the capital allowances. If a balancing charge exceeds the allowances available then the net balancing charge is added to the adjusted trading profit of the period." I am not sure if this solves the question, but I am quite sure I have seen that if there is a sale of the full amount of the asset - the computed balancing allowance/charge is the only WDA computed in Capital Allowances.

@ratanasoff said: "On disposal of the asset, a balancing adjustment is computed by deducting sale proceeds from the tax wdv (there is a balancing charge if sale proceeds exceed tax wdv, and a balancing allowance if sale proceeds are less than tax wdv). Having computed the balancing adjustment, the amount assessed or allowed is then reduced to the business proportion. A balancing allowance is then added in to the capital allowances of the period whereas a balancing charge will reduce the capital allowances. If a balancing charge exceeds the allowances available then the net balancing charge is added to the adjusted trading profit of the period." I am not sure if this solves the question, but I am quite sure I have seen that if there is a sale of the full amount of the asset - the computed balancing allowance/charge is the only WDA computed in Capital Allowances.

If it is not the final year of trade you do get a balancing allowance but only if the asset is de-pooled, ie it is in a single asset pool on its own. This is the only time you can get a balancing allowance/charge if it is not the final year of trade. When it comes to the main pool or the special rate pool, as is the case in the question, you can only ever get a balancing allowance if you are in the final year of trade otherwise the pool just continues until the trade ceases. As the company in the question is in a continuing trade and no mention of it being in it's final year of trade, there is no balancing allowance available. I am only a student so am no expert but I am just repeating exactly what is written in the bpp study text for F6 (UK). Anyway this point is probably only worth 0.5 - 1 mark max.

Hi Dicky123 I agree with the point you made on the capital allowances, How about the rest of the questions in terms of the gains and property loss etc. Also i would really appreciate the feedback on the Employment income for Petula.

Hey guys can i have your intake on the Employment income (Petula) question and also Zhi Question. Much appreciated :)

@huzaifa11 said: For question 31 regarding Petula Employment income : 1) Salary 230'000 2) Bonus (18600 + 22400) 41000 3) Car Millage (3000+5350) 8350 4) professional subscription (630) Golf 0 5) personal loan (140) 6) Pension Contribution Exempt Benefit 0 7) Property (12000-420-1640) 9940 8) Room (8900-7500) 1400 9) Gilt interest 3000 ------------------------------------------------------------------------------ Total £292'920 b) Pension allowance is like the PA it is capped between income of £150k to £210k) any income between that amount gets /2 and taken of the annual amount. income above £210k then is capped to £10k.

for 2, bonus, i added all three bonuses because we r supposed to select the earlier of "DATE OF ENTITLEMENT OR DATE OF PAYMENT". i saw all were entitled or paid in that same period so i added all three confidently, lol..i hope i am right :)

Only 2 of the 3 bonuses are included in the computation as the first one Petula became entitled to in the 15/16 tax year (01 April 2016). The payment date for this bonus was in the 16/17 tax year but as you take the earlier of these dates, this bonus is excluded, so I agree with huzaifa 11 on this. Accrued income from the gilts I calculated as 4/12 (3% x £250,000) = £2,500 but it's anybody's guess what the correct answer actually is!

It was fairly ok. I have sat for this paper for more than 3 times I am sure of getting it this time and good mark too even though it was a tough paper!

Hi Dicky Thanks for responding, on the giltz i miss read the question :( So i think the 2500 is correct. How about the pension contributions was there a calculation needed for an annual charge? (as her employment income is above £210k so cap is at £10k and the pension contribution is £30k....?) Also the car millage Benefit calculation were those the figures you received? Basically are there any differences in my answers compared to yours..

I agree with your figures for mileage. I don't think she has exceeded the pension annual allowance because even though the pension allowance is capped at £10K for that year and her employer has contributed £30k taking her £20k over, remember there is £20k unused annual allowance b/f from 2013/14 to use in 2016/17 (you can go back 3 years) so once you utilise that - she hasn't gone over the limit....

@huzaifa11 said: For question 31 regarding Petula Employment income : 1) Salary 230'000 2) Bonus (18600 + 22400) 41000 3) Car Millage (3000+5350) 8350 4) professional subscription (630) Golf 0 5) personal loan (140) 6) Pension Contribution Exempt Benefit 0 7) Property (12000-420-1640) 9940 8) Room (8900-7500) 1400 9) Gilt interest 3000 ------------------------------------------------------------------------------ Total £292'920 b) Pension allowance is like the PA it is capped between income of £150k to £210k) any income between that amount gets /2 and taken of the annual amount. income above £210k then is capped to £10k.

@huzaifa11 said: For question 31 regarding Petula Employment income : 1) Salary 230'000 2) Bonus (18600 + 22400) 41000 3) Car Millage (3000+5350) 8350 4) professional subscription (630) Golf 0 5) personal loan (140) 6) Pension Contribution Exempt Benefit 0 7) Property (12000-420-1640) 9940 8) Room (8900-7500) 1400 9) Gilt interest 3000 ------------------------------------------------------------------------------ Total £292'920 b) Pension allowance is like the PA it is capped between income of £150k to £210k) any income between that amount gets /2 and taken of the annual amount. income above £210k then is capped to £10k.

FOR 2, BONUS, I ADDED ALL THREE BONUSES BECAUSE IT IS SUPPOSED TO THE THE EARLIER OF DATE OF ENTITLEMENT OR DATE PAID, after looking at the dates, all were entitled or paid in that tax year so is dded all three bonuses

In section A does anyone remember the answer about the question of inheritance tax involving a brother and a sister.? What was the first question of vat in section b?

@huzaifa11 said: Hey guys can i have your intake on the Employment income (Petula) question and also Zhi Question. Much appreciated :)

Just see the latest sample cbe exam on accaglobal. It has the same 3 questions with answer key and marking scheme... You are welcome

@dicky123 said: Only 2 of the 3 bonuses are included in the computation as the first one Petula became entitled to in the 15/16 tax year (01 April 2016). The payment date for this bonus was in the 16/17 tax year but as you take the earlier of these dates, this bonus is excluded, so I agree with huzaifa 11 on this. Accrued income from the gilts I calculated as 4/12 (3% x £250,000) = £2,500 but it's anybody's guess what the correct answer actually is!

Yes it's 2500... 100% sure

Hey I've had a look and seen the questions but no answers. Can you post the link with the marking scheme please.

@huzaifa11 said: Hey I've had a look and seen the questions but no answers. Can you post the link with the marking scheme please.

Hi https://www.accaglobal.com/gb/en/student/exam-support-resources/fundamentals-exams-study-resources/f6/past-exam-papers/united-kingdom.html# Click on sample computer based examination ( march/June 2017) there you would find the 3 questions. There would be an option of view solution above each question.

woahh you guys have good knowledge regarding this stuff. made me even more frightened! .how many of you made it to the june attempt? i m sitting in this september for the first time!

you guys passed?