*** ACCA Paper ATX June 2019 Exam was.. Instant Poll and comments ***

Thought was a reasonable exam q1&2 seemed fine 3&4 a bit of a disaster though.

I have attempted roughly 80% only. Worse than last time. Question 4 was horrible.

Group relief without wasting dtr i did £55000-5158= 49842 relief for parent company

Trick with that question was to bring the uk tax down to the same value as the foreign tax which was 7000×14% =980

£5158 x19% =980

I’m guessing the rest of the marks on that question was calculating the capital allowances and relieving the rest of the losses carried forward ?

Profits 55000
Relief 49842
Profits after relief 5158

The losses in the other company didn’t include massive capital allowances.

Machine and equipment 160k Aia I think
Then building with special equipment

Total losses was huge once these were taken into account.

Agreed, I done the exact same thing.

@thelastfinalist said:
Group relief without wasting dtr i did £55000-5158= 49842 relief for parent company

Trick with that question was to bring the uk tax down to the same value as the foreign tax which was 7000×14% =980

£5158 x19% =980

I did the same as you. I had no tax for either company for first two years and still quite a big loss carried forward.

Can anyone remember any other answers? For q4 i deducted the 40k salaries from the 47k loss to make the loss 87k before spliting it 3 ways, no clue if tht was right. I then put 4 months into 18/19 and 8 months into 19/20?!

@cat2436 said:
I did the same as you. I had no tax for either company for first two years and still quite a big loss carried forward.

Can anyone remember any other answers? For q4 i deducted the 40k salaries from the 47k loss to make the loss 87k before spliting it 3 ways, no clue if tht was right. I then put 4 months into 18/19 and 8 months into 19/20?!

I did this as well for the losses and salary, and also put four months in 18/19 and 19/20. Then I carried back the loss three years as well for opening loss relief. Even if the figures are wrong, we still get follow through marks…I think?!

@cat2436 said:
I couldnt decide whether the salaries were already in the loss or not so just guessed and took them out again. Yes then i used the loss against the oldest of 3 years first and mentioned the part of his personal allowance lost in the second to last year could be reinstated.

Part a of that question i only had a very small tax liability against the emi shares maybe 2000 ish so after tax proceeds were in the £70-80k region

My mind blanked on emi shares choose the value at £2.60 option price for base cost?

The question that really got me was the laptop cash lump sum and rent paid.

Didn’t know where I was going in that question

Yea i think you are right using 2.60, i used 2.34 because i thought they were allowed up to 10% discount, but looked through my book and it doesnt say that so not sure where i made that up from!

I said the 10k paid to the lady before she started work was just extra taxable employment income. I used 9/12 of the annual charge but think i should have used the total of rent paid to work out class 1a and i did 20% of the laptop.

I was expecting the 35 marker to be on Corp Tax with Group / Overseas aspects. But Q1 was about Income Tax, NIC, IHT and CGT.

In Q1 (a) examiner asked for “additional cash required” for Josh instead of the usual after tax income. Took me a second to see what they meant.

The examiner gave us Josh’s personal living costs and we were required to calculate his shortfall to make ends meet. We had to advise how much he would have to get from his aunt Maia to meet the expenses.

The tax and NIC had to be calculated based on salary, benefits and dividends but where some candidates could go wrong was to calculate the cash shortfall and not get confused with the after tax profit because some benefits were non-cash.

Rest of Q1 gave a series of options (independent of each other) of what his aunt would give him, like cash, a property to earn rent from, shares to earn dividends from etc. We had to explain Income Tax, IHT and CGT implications.

Property was previously claimed Gift Relief on. So, base cost calculations. Shares were owned for less than 2 years. There may have been something else in Q1 which I can’t recall.

Q2 was about Group Corp Tax with Group Relief, DTR, Overseas Branch, VAT. No SSE, by the way. (Unless I missed it! Lol) The examiner specifically asked for exact GR to make Tax payable Nil without wasting DTR. We had to do Capital Allowance calculations for 2 years with Integral Features etc. We had to advise on Group VAT but easier stuff like not charging each other VAT were already mentioned by the examiner. The ethics bit was on Tax Evasion and Confidentiality where the client company had undeclared gains. (But we were told not to comment on Money Laundering and Penalties, basically taking out some easier marks. But there was still plenty to write about).

In Q3 and Q4, we had (in no particular order)
– Partnership loss allocation: Rod’s share of partnership loss after ‘salaries’ of partners.
– The ways he could use the loss and get refund.
– EMI shares
– VAT registration (When to register? Recovery of pre-registration input VAT, The benefits of voluntary registration)
– Annual VAT scheme
– Lump sum at the start of employment, accommodation benefits
– R&D (Explain and Calculate). I couldn’t be sure if the company was large or small. So, I did both separately 🙁
– Opening year rule but there was a loss. So we had to say that loss can not be used twice.
– Can’t recall the rest

I had taken a long (too long) break from ACCA. So, my P2 and P3 papers from 2012 are going to expire this session unless I pass today’s ATX.

Getting all sorts of worries like perhaps my extra pages are going to fall off the script. I didn’t get to attach them as well I would have liked. Do they have a mechanism to make sure that all extra pages are marked?

@thelastfinalist said:
Group relief without wasting dtr i did £55000-5158= 49842 relief for parent company

Trick with that question was to bring the uk tax down to the same value as the foreign tax which was 7000×14% =980

£5158 x19% =980

I’m guessing the rest of the marks on that question was calculating the capital allowances and relieving the rest of the losses carried forward ?

I did the same. Then off set some against own profits the next year and remainder against the parent company the next year