TAXATION

1. THE UK TAX SYSTEM

a. The overall function and purpose of taxation in a modern society
i. Economic factors
ii. Social justice

Progressive taxation / Regressive taxation / Proportional taxation / Ad Valorem principle

b. Types of taxes

Income tax / national insurance contributions / capital gains tax / inheritance tax / corporation
tax / value added tax

c. Direct and indirect taxation

d. Structure of the UK tax system
i. HM Revenue and Customs (HMRC)
ii. Commissioners
iii. District offices
iv. Accounts and payment offices
e. Sources of tax law
i. Tax legislation / statues
ii. Case law
iii. HMRC guidance

Statements of practice, extra-statutory concessions, internal guidance manuals, HMRC

webside; leaflets and booklets, detailed technical guidance.

f. The interaction of the UK tax system and overseas tax systems

g. Tax avoidance and tax evasión
h. Professional and ethical guidance
i. Money laundering regulations

2. INCOME TAX COMPUTATION

a. Introduction
b. Computation of taxable income
Dividend income, Savings Income, Non-Savings Income
i. Exempt income
NS&IC, ISA, premiu bond winnings
ii. Tax liability (Income tax on taxable income) and
tax payable (= - Less PAYE)
iii. Taxation of non-savings income
1. 1 – 37.700 20%
2. 37.701 – 150.000 40%
3. 150.001 + 45%
iv. Non-savings income consists of:
1. Trading profit (chapter 4 – 8)
2. Employment Income (9)
3. Property Income (3)
c. Income from investments – saving and dividends
 i. Calculation of tax
ii. Accrued income scheme
d. Personal allowance
i. Transferable amount of personal allowance
e. Deductions from total income
i. Reliefs are tax deductible
ii. Qualifying interest is:
iii. Los reliefts
f. Payments to charity under the gift aid system and personal pensión
contributions
i. Basic rate taxpayers
ii. Higher rate tax payer
iii. Additional rate tax payer
g. Jointly owned assets of a married couple, or by a couple in a civil partnership
h. Child Benefit income tax charge
i. Residence
3. PROPERTY INCOME AND INVESTMENTS – INDIVIDUALS
a. Property income liable
i. Basis of assessment
ii. Allowable deductions
b. Property losses
c. Finance expenses on property income
d. Furnished holiday lettings
e. Rent a room relief
f. Lease premiums on grant of short lease (50 years or less)
i. Introduction
ii. Trading profit deduction for traders
g. Individual savings accounts (ISAs)
i. As tax efficient investment
ii. Components o fan ISA
iii. Subscription limits
h. National savings

4. TAX ADJUSTED TRADING PROFIT – INDIVIDUALS

a. Badges of trade
i. Subject matter
ii. Length of ownership
iii. Preguency of transactions
iv. Supplementary work and marketing: improvement
v. Reason for sale
vi. Profit motive
b. Adjusting the accounting profit
i. Introduction
ii. Typical expenditure by a business
5. CAPITAL ALLOWANCES
a. Capital allowances
b. Capital allowance computations for plant & machinery
i. 3 types of capital allowance avaiable
c. Special rate pool
d. Sale of plant and machinery
e. Non-pool assets
i. Private use o fan asset by the owner of the business
ii. Short – life assets
iii. Balancing adjustments on the main or special rate pools
f. Preparing the capital allowance compitation
g. Full pro forma capital allowances compitation
h. Strucctures & buildings allowance

6. TRADING PROFIT – BASIC PERIODS

a. Basic periods
i. Opening year rules
ii. Closing years rules
b. Basic periods for capital allowances
i. Opening years
ii. Cessation of trade
c. Cash basis for small businesses

7. TAX ADJUSTED TRADING LOSSES – INDIVIDUALS

a. Trading losses
i. Trading profit assessment
ii. Relieving the lsos
b. The reliefs avaiable
c. Carry forward of trading losses
d. Los relief against total income
e. Losses in opening years
f. Terminal los relief

8. PARTNERSHIPS
a. Introduction
b. Trading income
c. Alocation of the trading profit or trading los
d. A change in the profit sharing agreement
e. Partnership capital allowances
f. Commencement and cessatino
g. A change in the membership of a partnership
h. Partnership losses
9. EMPLOYMENT INCOME
a. The scope of employment income
b. Emplyment -v- self employment?
c. Assessable emoliments
d. Dedcuctibility of expenses from employment income
e. Approved mileage allowances
f. Empllyment income pro forma
g. Benefits in kind

h. Taxable benefits
i. Principles
ii. Vouchers exchangeable for goods and services unless specifically
exempt
iii. Living accommodation
iv. Expenses connected with living accommodation
v. Use of assets
vi. Gifts of assets
vii. Company car Benefit
viii. Fuel provided for privete use
ix. Vans and heavier comercial vehicles (rates given in tax tables)
x. Beneficial loans
i. PAYE system
i. Pay As You Earn
ii. Employers’ duties
iii. Apllication of PAYE
iv. PAYE codes
v. Changes to coding
vi. Year and returns
vii. Employees leaving or joining

10. PENSION SCHEMES

a. Types of pensión scheme
i. Personal pensión scheme
ii. Occupational pensión scheme
b. Tax relief
c. Anual allowancee (AA)
d. Anual allowance charge
e. Lifetime allowance
11. NATIONAL INSURANCE CONTRIBUTIONS (NIC)
a. Employed earners
i. Class 1 contributions
ii. Class 1ª contributions
b. Emplyment allowance
c. Self-employed earners
i. Class 2 contribution
ii. Class 4 contribution

12. CAPITAL GAINS TAX – INDIVIDUALS

13. CAPITAL GAINS TAX – INDIVIDUALS – SHARES
14. CAPITAL GAINS TAX – INDIVIDUALS – RELIEFS
15. SELF – ASSESSMENT AND PAYMENT OF TAX FOR INDIVIDUALS
16. CORPORATION TAX
17. LONG PERIOD OF ACCOUNT
18. TAX ADJUSTED LOSSES – COMPANIES
19. CHARGEABLE GAINS – COMPANIES
20. CHARGEABLE GAINS – COMPANIES – FURTHER ASPECTS
21. CHARGEABLE GAINS – COMPANIES – RELIEFS
22. CORPORATION TAX – GROUPS
23. SELF-ASSESSMENT AND PAYMENT OF TAX FOR COMPANIES
24. INHERITANCE TAX
25. VALUE ADDED TAX – VAT
26. TAX PLANNING STYLE QUESTIONS
a. Introduction
b. Definition of accounting
c. Types of business entity
d. Users of accounting information
e. Comparison of financial accounting with management accounting

27. The Statement of Financial Position and Statement of Profit or Loss

a. Introduction
b. The dual (or double) effect of transactinos
c. The statement of financial position
d. The statement of profit or loss
e. The difference between capital and revenue ítems
f. The accounting equation

28. Double Entry Bookkeeping

a. Introduction
b. The nominal ledger
c. The general rules of douoble entry
d. Worked example
e. Balancing the accounts
f. The trial balance
g. Closing off the accounts
h. Preparation of the financial statements
i. ‘tidying up’ the owner
29. Accruals and Prepayments
a. Introduction
b. Prepayments
c. Accruals
d. Subsequent accounting periods
e. Summary of entries

30. IAS 37 – Provisions, Contingent Liabilities and Contingent Assets

a. Definitions
b. The requirements of IAS 37

31. Depreciation
a. Introduction
b. Non-current assets
c. Depreciation
d. Methods of calculating depreciation
e. Accounting for depreciation
f. Sale of non-current assets
g. Revaluation of non-current assets
h. The non-current assets register

32. The provisions of IAS 16 Property, Plant and Equipment

a. The main points of IAS 16 are as follows
b. Disclousure requirements

33. Irrecoverable Debts and Allowances

a. Introduction
b. Definitions
c. Treatment in the financial statements
d. The accounting entries

34. Inventory and IAS 2

a. Introduction
b. The accounting entries
c. The valuation of inventory
d. The determination of cost
e. The provisions of IAS 2: inventories
f. Continuous inventory recording

35. Books of Prime Entry

a. Introduction
b. The books of prime entry
c. The sales (or receivables) and purchases (or payables) ledgers
d. A diagramo f the complete bookkeeping system
e. The Petty cash book

36. Journal Entries

 a. Introduction
b. The formato f journal entries

37. Sales Tax

a. Introduction
b. The principles of sales tax
c. The calculation of sales tax
d. The accounting entries

38. Accounting for Limited Companies

a. Introduction
b. The key features of a limited company
c. The layout of financial statements
d. The statement of profit or los
e. The statement of financial position
f. Capital on the statement of financial position
g. Dividends
h. Reserves
i. The issue of shares
j. Rights issues and bonus issues of shares
k. The revaluation reserve
l. Preference shares
m. The statement of comprehensive income
n. The statement of changes in equity

39. Statements of Cash Flows

a. Introduction
b. Description
c. The indirect method
d. The direct method

40. Bank Reconciliations

a. Introduction
b. Terminology
c. Reasons why the balance on the bank statement may differ from the balance
in the cash account
d. The preparation of a bank reconciliation statement

41. Control Accounts

a. Introduction
b. control accounts
c. returns, discounts, and contra entries
d. the payables ledger control account
e. control account reconciliations

42. Adjustments to Profit and Suspense Accounts

a. Introduction
b. Adjustments to profit
 c. Suspense accounts

43. Mark-up and Margins

a. Introduction
b. Mark-up
c. Gross profit margin
d. More complicated question

44. Accounting Conventions and Policies

a. Introduction
b. The fundamental accounting concepts
c. Other accounting concepts and qualitative characteristics
d. Alternative valuation bases
e. IFRS 15 revenue from contracts with customers
f. IFRS 15 prompt payment discount

45. IAS 10 – Events after the Reporting Period

a. Introduction
b. IAS 10: events after the reporting period

46. IAS 38 – Intangible Assets: Goodwill, Research and Development

a. Introduction
b. Goodwill
c. Research and development

47. Group Accounts The Consolidated Statement of Financial Position (1)

a. Introduction
b. Definitions
c. The consolidated statement of financial position
d. Pre-acquisition profits
e. Goodwill arising on consolidation

48. Group Accounts The Consolidated Statement of Financial Position (2)

a. Introduction
b. Non-controlling interest
c. Goodwill arising on consolidation
d. Inter-entity transactions

49. Group Accounts The Consolidated Statement of Profit or Loss

a. Introduction
b. The principles
c. Inter-entity (or intra-group) trading

50. Group Accounts – Further Points

a. Introduction
b. The definition of a subsidiary
c. Associate Companies
51. Interpretation of Financial Statements
a. Introduction
b. The main áreas
c. Worked example
d. Limitations of ratio analysis

52. The Regulatory Framework

a. Introduction
b. The purpose of international financial reporting standards (previously called
international accounting standards)
c. The international financial reporting standards foundation
d. The international accounting standards board (IASB)
e. The IFRS advisory council (IAC)
f. The international financial reporting interpretations committee (IFRIC)
g. Exposure drafts
h. The conceptual framework

53. Business Documentation

a. Introduction
b. Business documents