01 Exam notes

june and december 2010 sessions

tax
paper f6, taxation (uk) The maximum contribution that can qualify for tax relief without
The following notes refer to Paper F6 (UK) only. Guidance for evidence of earnings is £3,600.
other variant papers – where available – is published on the
ACCA website. Authorised Mileage Allowances: Cars
Up to 10,000 miles 40p
Examinable Legislation Over 10,000 miles 25p
Legislation which received Royal Assent on or before
30 September annually, will be assessed in the following year. Capital Allowances
Therefore, examinations in June 2010 and December 2010 will be Plant and Machinery
assessed on legislation which received Royal Assent on or before %
30 September 2009. General pool first-year allowance 40
writing-down allowance 20
Finance Act Special rate pool 10
The latest Finance Act which will be examined in Paper F6 (UK) at the
June 2010 and December 2010 sessions is the Finance Act 2009. The first-year allowance of 40% applies to expenditure during the
With regard to prospective legislation when, for example, provisions period 6 April 2009 to 5 April 2010 (1 April 2009 to 31 March
included in the Finance Act will only take effect at some date in the 2010 for limited companies).
future, such legislation will not normally be examined until such time
as it actually takes effect. The same rule applies to the effective date Motor cars
of the provisions of an Act introduced by statutory instrument. CO2 emissions up to 110 grams per kilometre 100
The following relevant articles have been published in Student CO2 emissions between 111 and 160 grams per kilometre 20
Accountant and are also available on the ACCA website: CO2 emissions over 160 grams per kilometre 10
¤ Finance Act 2009 – September 2009
¤ Adjustment of profit questions – November 2009 Annual investment allowance
¤ Examiner’s approach to Paper F6 (UK) – January 2007. First £50,000 of expenditure 100

SUPPLEMENTARY INSTRUCTIONS Industrial Buildings Allowance

The following supplementary instructions will be included in the Writing-down allowance 2
June 2010 and December 2010 exams:
¤ calculations and workings need only be made to the nearest £ Corporation Tax
¤ all apportionments should be made to the nearest month Financial Year 2007 2008 2009
¤ all workings should be shown. Small companies rate 20% 21% 21%
Full rate 30% 28% 28%
Tax rates and allowances Lower limit (£) 300,000 300,000 300,000
The following tax rates and allowances will be reproduced in Upper limit (£) 1,500,000 1,500,000 1,500,000
the exam paper for Paper F6 (UK). In addition, other specific Marginal relief fraction 1/40 7/400 7/400
information necessary for candidates to answer individual
questions will be given as part of the question. For example, Marginal Relief
in the case of corporate chargeable gains, the relevant retail (M - P) x I/P x Marginal relief fraction
prices index for particular dates will be given at the end of the
relevant question. Extended loss relief
Extended loss relief is capped at a maximum of £50,000. For
Income Tax limited companies it applies to loss making accounting periods
% ending between 24 November 2008 and 23 November 2010.
Basic rate £1–£37,400 20
Higher rate £37,401 and above 40 Value Added Tax
Standard rate – up to 31 December 2009 15%
A starting rate of 10% applies to savings income where it falls Standard rate – from 1 January 2010 onwards 17.5%
within the first £2,440 of taxable income.
Registration limit £68,000
Personal Allowances Deregistration limit £66,000
Standard £6,475
65–74 £9,490 Capital Gains Tax
75 and over £9,640 Rate of tax 18%
Income limit for age-related allowances £22,900 Annual exemption £10,100
Entrepeneurs’ relief
Car Benefit Percentage – Lifetime factor £1,000,000
The base level of CO2 emissions is 135 grams per kilometre. – Relief factor 4/9ths
A lower rate of 10% applies to cars with CO2 emissions of 120
grams per kilometre or less. National Insurance Contributions (not contracted out rates)
%
Car Fuel Benefit Class 1 Employee £1–£5,715 per year Nil
The base figure for calculating the car fuel benefit is £16,900. £5,716–£43,875 per year 11.0
£43,876 and above per year 1.0
Pension Scheme Limits Class 1 Employer £1–£5,715 per year Nil
Annual allowance £245,000 £5,716 and above per year 12.8
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02

Class 1A 12.8 A starting rate of 10% applies to savings income where it falls
Class 2 £2.40 per week within the first £2,440 of taxable income.
Class 4 £1–£5,715 per year Nil
£5,716–£43,875 per year 8.0 Personal Allowances
£43,876 and above per year 1.0 Standard £6,475
65–74 £9,490
Rates of Interest (assumed) 75 and over £9,640
Official rate of interest 4.75% Income limit for age-related allowances £22,900
Rate of interest on underpaid tax 2.5%
Rate of interest on overpaid tax 0.0% Car Benefit Percentage
The base level of CO2 emissions is 135 grams per kilometre.
Paper p6, Advanced Taxation (UK) A lower rate of 10% applies to cars with CO2 emissions of 120
The following notes refer to Paper P6 (UK) only. Guidance for grams per kilometre or less.
other variant papers – where available – are published on the
ACCA website. Car Fuel Benefit
The base figure for calculating the car fuel benefit is £16,900.
Examinable Legislation
Legislation which received Royal Assent on or before Pension Scheme Limits
30 September annually, will be assessed in the following year. Annual allowance £245,000
Therefore, examinations in June 2010 and December 2010 will Lifetime allowance £1,750,000
be assessed on legislation which received Royal Assent on or
before 30 September 2009. The maximum contribution that can qualify for tax relief without
evidence of earnings is £3,600.
Finance Act
The latest Finance Act which will be examined in Paper P6 (UK) Authorised Mileage Allowances: Cars
at the June 2010 and December 2010 sessions is the Finance Up to 10,000 miles 40p
Act 2009. Over 10,000 miles 25p
With regard to prospective legislation when, for example,
provisions included in the Finance Act will only take effect at some Capital Allowances
date in the future, such legislation will not normally be examined Plant and Machinery
until such time as it actually takes effect. The same rule applies %
to the effective date of the provisions of an Act introduced by First-year allowance 40
statutory instrument. Writing-down allowance – general pool 20
The following relevant articles have been published in Student – special rate pool 10
Accountant and are also available on the ACCA website:
¤ Finance Act 2009 – September 2009 The first-year allowance of 40% applies to expenditure during the
¤ Examiner’s approach to Paper P6 (UK) – June/July 2007 period 6 April 2009 to 5 April 2010 (1 April 2009 to 31 March
¤ Trusts and tax for P6 (UK) – February 2010 2010 for limited companies).
¤ Corporation tax for P6 (UK) – January 2010
¤ Capital gains tax and inheritance tax for P6 (UK) – Motor cars
March 2010 CO2 emissions up to 110 grams per kilometre 100
¤ International travellers for P6 (UK) – February 2010 CO2 emissions between 111 and 160 grams per kilometre 20
¤ Corporation tax for groups for P6 (UK) – January 2010. CO2 emissions over 160 grams per kilometre 10

SUPPLEMENTARY INSTRUCTIONS Annual investment allowance

The following supplementary instructions will be included in the First £50,000 of expenditure 100
June 2010 and December 2010 exams:
¤ you should assume that the tax rates and allowances for the Industrial Buildings Allowance
tax year 2009/10, and for the financial year to 31 March Writing-down allowance 2
2010, will continue to apply for the foreseeable future, unless
you are instructed otherwise Corporation Tax
¤ calculations and workings need only be made to the Financial Year 2007 2008 2009
nearest £ Small companies rate 20% 21% 21%
¤ all apportionments should be made to the nearest month Full rate 30% 28% 28%
¤ all workings should be shown. Lower limit (£) 300,000 300,000 300,000
Upper limit (£) 1,500,000 1,500,000 1,500,000
Tax rates and allowances Marginal relief fraction 1/40 7/400 7/400
The following tax rates and allowances will be reproduced in
the exam paper for Paper P6 (UK). In addition, other specific Marginal Relief
information necessary for candidates to answer individual (M - P) x I/P x Marginal relief fraction
questions will be given as part of the question.
Extended loss relief
Income Tax Extended loss relief is capped at a maximum of £50,000.
% For limited companies it applies to loss making accounting
Basic rate £1–£37,400 20 periods ending between 24 November 2008 and 23 November
Higher rate £37,401 and above 40 2010.
03 Exam notes

cat: tax
Value Added Tax paper 9, Preparing Taxation Computations (UK)
Standard rate – up to 31 December 2009 15% The following notes refer to Paper 9 (UK) only. Guidance for other
Standard rate – from 1 January 2010 onwards 17.5% variant papers – where available – is published on the ACCA website.
Registration limit £68,000
Deregistration limit £66,000 Examinable Legislation
Legislation which received Royal Assent on or before 30
Inheritance Tax September annually, will be assessed in the following year.
£1–£325,000 Nil Therefore, examinations in June 2010 and December 2010 will be
Excess 40% assessed on legislation which received Royal Assent on or before
30 September 2009.
Capital Gains Tax
Rate of tax 18% Finance Act
Annual exemption £10,100 The latest Finance Act which will be examined in Paper 9 (UK)
Entrepeneurs’ relief at the June 2010 and December 2010 sessions is the Finance
– Lifetime factor £1,000,000 Act 2009. With regard to prospective legislation when, for
– Relief factor 4/9ths example, provisions included in the Finance Act will only take
effect at some date in the future, such legislation will not normally
National Insurance Contributions (not contracted out rates) be examined until such time as it actually takes effect. The same
% rule applies to the effective date of the provisions of an Act
Class 1 Employee £1–£5,715 per year Nil introduced by statutory instrument.
£5,716–£43,875 per year 11.0 The following relevant article has been published in Student
£43,876 and above per year 1.0 Accountant and is also available on the ACCA website:
Class 1 Employer £1–£5,715 per year Nil ¤ Finance Act 2009 – September 2009.
£5,716 and above per year 12.8
Class 1A 12.8 SUPPLEMENTARY INSTRUCTIONS
Class 2 Small earnings exception limit – £5,075 The following supplementary instructions will be included in the
£2.40 per week June 2010 and December 2010 exams:
Class 4 £1–£5,715 per year Nil ¤ calculations and workings need only be made to the
£5,716–£43,875 per year 8.0 nearest £
£43,876 and above per year 1.0 ¤ all apportionments should be made to the nearest month
¤ all workings should be shown.
Rates of Interest (assumed)
Official rate of interest 4.75% TAX RATES AND ALLOWANCES
Rate of interest on underpaid tax 2.5% The following tax rates and allowances are to be used in answering
Rate of interest on overpaid tax 0.0% the questions.

Stamp Duty Land Tax Income Tax

Rate %
£150,000 or less1 Nil Basic rate £1–£37,400 20
£150,001–£250,000 1% Higher rate £37,401 and above 40
£250,001–£500,000 3%
£500,001 or more 4% Note:
A starting rate of 10% applies to the first £2,440 of savings
1
For residential property, the nil rate band was increased to income where such income falls within the first £2,440 of taxable
£175,000 until 31 December 2009 after which it will be restricted income. UK dividends will be taxed at 10% when they fall within
to £125,000. the basic rate band and 32.5% thereafter.

Stamp duty Personal Allowance £6,475

Shares 0.5%
Car Benefit Percentage
The base level of CO2 emissions is 135 grams per kilometre.
A lower rate of 10% applies to cars with CO2 emissions of 120
grams per kilometre or less.

Car Fuel Benefit

The base figure for calculating the car fuel benefit is £16,900.

Authorised Mileage Allowances: Cars

Up to 10,000 miles 40p
Over 10,000 miles 25p

Pension Scheme Limits

The maximum contribution that can qualify for tax relief without
evidence of earnings is £3,600.

Annual allowance £245,000

 student accountant essential exam guide 04/2010
04

Rate of Interest
Official rate of interest (assumed) 4.75%

Capital Allowances
Plant and Machinery
%
General pool first-year allowance 40
writing-down allowance 20
Special rate pool 10

The first-year allowance of 40% applies to expenditure during the

period 6 April 2009 to 5 April 2010 (1 April 2009 to 31 March
2010 for limited companies).

Motor cars
CO2 emissions up to 110 grams per kilometre 100
CO2 emissions between 111 and 160 grams per kilometre 20
CO2 emissions over 160 grams per kilometre 10

Annual investment allowance

First £50,000 of expenditure 100

Industrial Buildings Allowance

Writing-down allowance 2

Corporation Tax
Financial Year 2007 2008 2009
Small companies rate 20% 21% 21%
Full rate 30% 28% 28%
Lower limit (£) 300,000 300,000 300,000
Upper limit (£) 1,500,000 1,500,000 1,500,000
Marginal relief fraction 1/40 7/400 7/400

Marginal Relief
(M - P) x I/P x Marginal relief fraction

Value Added Tax

Standard rate – up to 31 December 2009 15%
Standard rate – from 1 January 2010 onwards 17.5%
Registration limit £68,000
Deregistration limit £66,000

Capital Gains Tax

Rate of tax 18%
Annual exemption £10,100
Entrepeneurs’ relief
– Lifetime factor £1,000,000
– Relief factor 4/9ths

National Insurance Contributions

(not contracted-out rates)
%
Class 1 Employee £1–£5,715 per year Nil
£5,716–£43,875 per year 11.0
£43,876 and above per year 1.0
Class 1 Employer £1–£5,715 per year Nil
£5,716 and above per year 12.8
Class 1A 12.8
Class 2 £2.40 per week
Class 4 £1–£5,715 per year Nil
£5,716–£43,875 per year 8.0
£43,876 and above per year 1.0

Where weekly or monthly calculations are required, the Class 1
limits shown above should be divided by 52 (weekly) or 12
(monthly) as applicable.