F
Contact: +923327670806
SMART NOTES ACCA F6 (TAXATION)
SMART STUDY ACCA
40 Pages only
TAXATION
SMART NOTES
For Exams in June & DecemberTaxatn
2015
SMART NOTES
ACCA Online
Syllabus Classes 100%
Coverage
M
Plan
arks1:Oriented
Live Interactive classes
(Exam Focused)
Plan
A 2: Offline Recorded Lectures
uthenticity (Reviewed by top tutors)
Plan 3: Live plus Recorded Lectures
Relevant (ICAEW, ACCA F6&P6)
T
Mob/ Whatsapp:
ime Saving: 00923346853808
Just 50 pages
Aziz Ur Rehman (ACCA)
Teaching Experience: 10 Years
P6 (ATX) SMART NOTES (50 Page)
FR (F6) SMART NOTES (40 Pages)
For Exams up-to March 2021 (FA19)
P3 SMART NOTES (50 Pages)
0 CPE Islamabad & SKANS Peshawar
, SMART STUDY ACCA ACCA F6 (TX)
CONTENTS
Chapter 1 UK tax system
Chapter 2 Income tax computation
Chapter 3 Property & Investment income
Chapter 4 Employment income
Chapter 5 Income from self-employment
Chapter 6 Capital allowances
Chapter 7 Basis period
Chapter 8 Trading losses
Chapter 9 Partnership
Chapter 10 Pension & National Insurance Contribution
Chapter 11 Capital gain tax
Chapter 12 Inheritance tax
Chapter 13 Corporation tax and Groups aspects for companies
Chapter 14 Value added tax (VAT)
0 Aziz Ur Rehman For Live & Recorded Lectures||00923346853808
, SMART STUDY ACCA ACCA F6 (TX)
CHAPTER 1
UK TAX SYSTEM
1 PURPOSE OF TAXATION
1.1 ECONOMIC FACTORS
• Spending by the government and the system of taxation impacts on the economy of a country.
• Taxation policies have been used to influence economic factors such as employment levels, inflation and
imports/exports
• Taxation policies are also used to direct economic behaviours of individuals and businesses. For example they
encourage individual saving habits (Individual Savings Accounts), and giving to charity (Gift Aid Scheme).
• Further they may discourage motoring (fuel duties), smoking & alcohol (duties and taxes) and environmental
pollution (landfill tax).
• As government objectives change, taxation policies may be altered accordingly.
1.2 SOCIAL JUSTICE
The taxation system accumulates and redistributes wealth within a country.
2 STRUCTURE OF THE UK TAX SYSTEM
The structure of the UK tax system can be shown as follows:
Structure Role and responsibility
Chan cellor o f th e The Chancellor has the overall responsibility for the UK tax system and one of his roles
Exchequer includes producing the Budget each year.
Treasury The Treasury is the ministry responsible under the Chancellor for the imposition and
collection of taxation.
Commissioners The Treasury appoint permanent civil servants, the Commissioners for HMRC.
Their duties include:
– Administering the UK tax system
– Implementing tax law.
HMRC HM Revenue and Customs (HMRC) is a single body that controls and administers all areas
of UK tax law.
The structure of HM Revenue and Customs can be shown as follows:
➢ District offices
The Commissioners appoint Officers of HMRC to carry out the day to day work of managing
the tax system. Their roles include:
• Issuing tax returns
• Examining tax returns and accounts
• Calculating tax liabilities under the self assessment tax systems and PAYE.
➢ Accounts and payments offices
Accounts and payments offices deal with the collection and payment of tax.
3 PRINCIPLES OF TAXATION
Different taxes have different social effects.
Progressive taxation: As income rises the proportion of taxation raised also rises, for example UK income tax
Regressive taxation: As income raises the proportion of taxation paid falls, for example, tax on cigarettes is the same
regardless of the level of income of the purchaser, so as income rises it represents a lower proportion of income.
Proportional taxation: As income rises the proportion of tax remains constant.
Ad Valorem principle: A tax calculated as a percentage of the value of the item, for example Value Added Tax
1 Aziz Ur Rehman For Live & Recorded Lectures||00923346853808
, SMART STUDY ACCA ACCA F6 (TX)
4 TYPES OF TAXES
• Income Tax Payable by individuals on most income
• National Insurance Contributions Payable by individuals who are employed or self-employed and
businesses in relation to their employees
• Capital Gains Tax Payable by individuals on the disposal of capital assets
• Inheritance Tax Payable by individuals on lifetime and death transfers of assets
• Corporation Tax Payable by companies on income and chargeable gains
• Value Added Tax (VAT) Payable by the final consumer on purchases of most goods and services
5 DIRECT AND INDIRECT TAXATION
➢ Direct taxation
Taxes are paid directly to the Government, based on income and profit. e.g. Income tax, Corporation tax, Capital gains
tax, Inheritance tax.
➢ Indirect taxation
Taxes are collected via an intermediary who passes them on to the government for example: VAT where the
consumer pays VAT to a supplier, who then pays to the government
6 SOURCES OF TAX LAW
➢ Tax legislation / statutes
Adherence is mandatory because these are laws. It is updated every year by the annual Finance Act.
The Government may issue Statutory Instruments which are detailed notes on an area of tax legislation.
➢ Case law
This refers to decisions made in tax cases. The rulings in the courts are binding and so provide guidance on the
interpretation of tax legislation.
➢ HMRC guidance
This is issued due to the complexity of the legislation
• Statements of practice – sets out how HMRC intend to apply the law
• Extra statutory concessions – sets out circumstances in which HMRC will not apply the strict letter of the law.
• Internal guidance manuals – HMRC’s own manuals, produced for their staff which provide guidance on
interpretation of law and also available to the public
• Press releases/Briefs – provide details of a specific tax issue, for example, used to communicate the
information stated in the annual budget
• HMRC website, leaflets and booklets – provide explanations of various tax issues in non-technical language
7 MONEY LAUNDERING REGULATIONS
Money Laundering is the term used for offences including benefiting from or concealing the proceeds of a crime.
An individual is engaged in money laundering if they:
a) conceal, disguise, transfer or remove criminal property from the UK
b) enter into or become concerned in an arrangement that they know or suspect involves the acquisition of criminal
property on behalf of another person
c) acquire or have possession of criminal property.
All businesses within regulated sectors must appoint a money laundering reporting officer (MLRO) within the firm.
The MLRO will decide whether a transaction should be reported to the Serious Organised Crime Agency (SOCA).
Where a report is made the client should not be informed as this may amount to ‘tipping off’, which is an offence.
A report to SOCA does not remove the requirement to disclose the information to HMRC.
2 Aziz Ur Rehman For Live & Recorded Lectures||00923346853808
Contact: +923327670806
SMART NOTES ACCA F6 (TAXATION)
SMART STUDY ACCA
40 Pages only
TAXATION
SMART NOTES
For Exams in June & DecemberTaxatn
2015
SMART NOTES
ACCA Online
Syllabus Classes 100%
Coverage
M
Plan
arks1:Oriented
Live Interactive classes
(Exam Focused)
Plan
A 2: Offline Recorded Lectures
uthenticity (Reviewed by top tutors)
Plan 3: Live plus Recorded Lectures
Relevant (ICAEW, ACCA F6&P6)
T
Mob/ Whatsapp:
ime Saving: 00923346853808
Just 50 pages
Aziz Ur Rehman (ACCA)
Teaching Experience: 10 Years
P6 (ATX) SMART NOTES (50 Page)
FR (F6) SMART NOTES (40 Pages)
For Exams up-to March 2021 (FA19)
P3 SMART NOTES (50 Pages)
0 CPE Islamabad & SKANS Peshawar
, SMART STUDY ACCA ACCA F6 (TX)
CONTENTS
Chapter 1 UK tax system
Chapter 2 Income tax computation
Chapter 3 Property & Investment income
Chapter 4 Employment income
Chapter 5 Income from self-employment
Chapter 6 Capital allowances
Chapter 7 Basis period
Chapter 8 Trading losses
Chapter 9 Partnership
Chapter 10 Pension & National Insurance Contribution
Chapter 11 Capital gain tax
Chapter 12 Inheritance tax
Chapter 13 Corporation tax and Groups aspects for companies
Chapter 14 Value added tax (VAT)
0 Aziz Ur Rehman For Live & Recorded Lectures||00923346853808
, SMART STUDY ACCA ACCA F6 (TX)
CHAPTER 1
UK TAX SYSTEM
1 PURPOSE OF TAXATION
1.1 ECONOMIC FACTORS
• Spending by the government and the system of taxation impacts on the economy of a country.
• Taxation policies have been used to influence economic factors such as employment levels, inflation and
imports/exports
• Taxation policies are also used to direct economic behaviours of individuals and businesses. For example they
encourage individual saving habits (Individual Savings Accounts), and giving to charity (Gift Aid Scheme).
• Further they may discourage motoring (fuel duties), smoking & alcohol (duties and taxes) and environmental
pollution (landfill tax).
• As government objectives change, taxation policies may be altered accordingly.
1.2 SOCIAL JUSTICE
The taxation system accumulates and redistributes wealth within a country.
2 STRUCTURE OF THE UK TAX SYSTEM
The structure of the UK tax system can be shown as follows:
Structure Role and responsibility
Chan cellor o f th e The Chancellor has the overall responsibility for the UK tax system and one of his roles
Exchequer includes producing the Budget each year.
Treasury The Treasury is the ministry responsible under the Chancellor for the imposition and
collection of taxation.
Commissioners The Treasury appoint permanent civil servants, the Commissioners for HMRC.
Their duties include:
– Administering the UK tax system
– Implementing tax law.
HMRC HM Revenue and Customs (HMRC) is a single body that controls and administers all areas
of UK tax law.
The structure of HM Revenue and Customs can be shown as follows:
➢ District offices
The Commissioners appoint Officers of HMRC to carry out the day to day work of managing
the tax system. Their roles include:
• Issuing tax returns
• Examining tax returns and accounts
• Calculating tax liabilities under the self assessment tax systems and PAYE.
➢ Accounts and payments offices
Accounts and payments offices deal with the collection and payment of tax.
3 PRINCIPLES OF TAXATION
Different taxes have different social effects.
Progressive taxation: As income rises the proportion of taxation raised also rises, for example UK income tax
Regressive taxation: As income raises the proportion of taxation paid falls, for example, tax on cigarettes is the same
regardless of the level of income of the purchaser, so as income rises it represents a lower proportion of income.
Proportional taxation: As income rises the proportion of tax remains constant.
Ad Valorem principle: A tax calculated as a percentage of the value of the item, for example Value Added Tax
1 Aziz Ur Rehman For Live & Recorded Lectures||00923346853808
, SMART STUDY ACCA ACCA F6 (TX)
4 TYPES OF TAXES
• Income Tax Payable by individuals on most income
• National Insurance Contributions Payable by individuals who are employed or self-employed and
businesses in relation to their employees
• Capital Gains Tax Payable by individuals on the disposal of capital assets
• Inheritance Tax Payable by individuals on lifetime and death transfers of assets
• Corporation Tax Payable by companies on income and chargeable gains
• Value Added Tax (VAT) Payable by the final consumer on purchases of most goods and services
5 DIRECT AND INDIRECT TAXATION
➢ Direct taxation
Taxes are paid directly to the Government, based on income and profit. e.g. Income tax, Corporation tax, Capital gains
tax, Inheritance tax.
➢ Indirect taxation
Taxes are collected via an intermediary who passes them on to the government for example: VAT where the
consumer pays VAT to a supplier, who then pays to the government
6 SOURCES OF TAX LAW
➢ Tax legislation / statutes
Adherence is mandatory because these are laws. It is updated every year by the annual Finance Act.
The Government may issue Statutory Instruments which are detailed notes on an area of tax legislation.
➢ Case law
This refers to decisions made in tax cases. The rulings in the courts are binding and so provide guidance on the
interpretation of tax legislation.
➢ HMRC guidance
This is issued due to the complexity of the legislation
• Statements of practice – sets out how HMRC intend to apply the law
• Extra statutory concessions – sets out circumstances in which HMRC will not apply the strict letter of the law.
• Internal guidance manuals – HMRC’s own manuals, produced for their staff which provide guidance on
interpretation of law and also available to the public
• Press releases/Briefs – provide details of a specific tax issue, for example, used to communicate the
information stated in the annual budget
• HMRC website, leaflets and booklets – provide explanations of various tax issues in non-technical language
7 MONEY LAUNDERING REGULATIONS
Money Laundering is the term used for offences including benefiting from or concealing the proceeds of a crime.
An individual is engaged in money laundering if they:
a) conceal, disguise, transfer or remove criminal property from the UK
b) enter into or become concerned in an arrangement that they know or suspect involves the acquisition of criminal
property on behalf of another person
c) acquire or have possession of criminal property.
All businesses within regulated sectors must appoint a money laundering reporting officer (MLRO) within the firm.
The MLRO will decide whether a transaction should be reported to the Serious Organised Crime Agency (SOCA).
Where a report is made the client should not be informed as this may amount to ‘tipping off’, which is an offence.
A report to SOCA does not remove the requirement to disclose the information to HMRC.
2 Aziz Ur Rehman For Live & Recorded Lectures||00923346853808
