Advanced Taxation
MAN3102
Module Schedule
https://surreylearn.surrey.ac.uk/d2l/le/lessons/241346/topics/2624240
Module Lecturer
Lecturer: Jacqueline McCartney
Office: 66MS02
Email:
Module Textbook
Taxation Finance Act 2022, Alan Melville, 28th Edition, Pearson
Module Assessment
• Mid-Term Assessment:
o Weighting: 30%.
o Content: Weeks 1-5.
o Time: 1 Hour.
o When: Week 7.
o How: In Person.
• Final:
o Weighting: 70%.
o Content: Weeks 1-11.
o Time: 2 Hours.
o When: TBC
o How: In Person.
o Consists of:
▪ Section A:
• Compulsory Question on Corporate Tax (30 Marks).
• Prepare by doing Weeks 8 & 9 Questions and Week 12
Revision Questions.
▪ Section B:
• 3 Questions Worth 20 Marks Each.
o Select two.
• On the Taxation of individuals, covering IT, CGT, VAT and
Inheritance Tax.
• Prepare by doing the remaining weeks questions from the
module.
Week 1
Introduction to the UK Tax System and Income Tax
Week 1 SBS on Demand
Week 1- Q2.5 Ivan
, Total (£) Non-Savings Savings Income Dividends (£)
Income (£) (£)
Part-Time Salary 17,055 17,055
Net Interest Gilt 1,700 1,700
Securities
Dividends 15,560 15,560
Total Income 34,315
Less: Personal 12,570 12,570
Allowance
Taxable Income 21,745 4,485 1,700 15,560
Net Gilt Interest = £1,360 * (100/80) = £1,700
The Premium bond prize is exempt from income tax.
PA = 100% if Total Income is below £100,000
Income Tax Due: Type of Rate Amount Rate Taxable Amount
Non-Savings Income : Basic Rate 4,485 @20% 897.00
Savings Income : Starting Rate 515 @0% 0.00
: Nil Rate 1,000 @0% 0.00
: Basic Rate 185 @20% 37.00
Dividend Income : Nil Rate 2,000 @0% 0.00
: Ordinary Rate 13,360 @8.75% 1,186.50
21,745
Tax Liability 2,120.50
Less: Tax Deducted at Source (£1,700 - £1,360) 340.00
Tax Payable 1,780.50
Week 1- Q2.6 Mary
Total (£) Non-Savings Dividends (£)
Income (£)
Business Profits 26,930 26,930
Rents Received 3,750 3,750
Dividends 124,460 124,460
Total Income 155,140 30,680 124,460
, Less: Personal 0 0
Allowance
Taxable Income 155,140 30,680 124,460
Personal Allowance for the Year = £nil.
Income Tax Due Type of Rate Amount Rate Tax Due
Non-Savings Income : Basic Rate 30,680 20% 6,136.00
Dividends Income : Nil Rate 2,000 0% 0.00
: Ordinary Rate 5,020 8.75% 439.25
: Upper Rate 112,300 33.75% 37,901.25
: Additional Rate 5,140 39.35% 2,022.59
155,140
Tax Liability 46,499.09
Ordinary Rate Band Left After Non-Savings Income = 37,700 – (30,680 + 2,000) = 5,020
Upper Rate Band Left After NSI = (150,000 – 37,700) = 112,300
Additional Rate Band (Remaining) = 124,460 – (2,000 + 5,020 + 112,300) = 5,140
Week 1 Reading
Chapter 1: Introduction to the UK Tax System:
UK Taxes:
• Direct Taxes (DT):
o Are charged on income, profits, or other gains and are either deducted at
source or paid directly to the tax authorities.
o The main direct taxes which are payable by individuals are IT and CGT and
inheritance tax.
o The main direct tax payable by companies is corporation tax.
o All of these DTs are administered by HM Revenue and Customs (HMRC),
which was formed in April 2005.
o National Insurance contributions, which can also be regarded as a firm of
direct taxation, are administered by the NICs and Employer Office of HMRC.
• Indirect Taxes (IDT):
o Are taxes on spending.
o They are charged when a taxpayer buys an item and are paid to the vendor as
part of the purchase price of that item. It is then the vendor’s duty to pass
the tax on to the tax authorities.
o The IDTs include value added tax (VAT), stamp duty, custom duties and the
excise duties levied on alcohol, tobacco and petrol.
o The only IDT considered in this book is VAT, which is also administered by
HMRC.
Sources of Tax Law (No Single Source of UK Taxation Law):
• Statute Law:
o The basic rules of the UK tax system are embodied in a number of tax
statutes or Acts of Parliament.
o The main statutes currently in force for each tax are as follows:
, Tax Statute Abbreviation
Income Tax Capital Allowances Act 2001 CAA 2001
Income Tax Act 2007 ITA 2007
National Insurance Social Security Contribution SSCBA 1992
and Benefits Act 1992
Capital Gains Tax Taxation of Chargeable TCGA 1992
Gains Act 1992
Inheritance Tax Inheritance Tax Act 1984 IHTA 1984
Corporation Tax Taxation of Chargeable TCGA 1992
Gains Act 1992
Capital Allowances Act 2001 CAA 2001
Corporation Tax Act 2009 CTA 2009
Corporation Tax Act 2010 CTA 2010
Value Added Tax Value Added Tax Act 1994 VATA 1994
o These statutes are amended each year by the annual Finance Act, which is
based upon the Budget proposals put forward by the Chancellor of the
Exchequer.
• European Union Law:
o Member states of the EU do not adopt a common tax system but must
implement EU Directives, some of which are concerned with taxation
(principally VAT).
o Much of the UK VAT law falls within the EU Directives of which the UK tax
system was based around and therefore remains even after the UK has left
the EU.
• Case Law:
o Disagreements over the interpretation of the tax acts.
o Resulting in thousands of tax cases that have been brought before the courts.
o The decisions made by judges in these cases form part of an important part
of the tax law of the UK.
• Statements Made by the Tax Authorities:
o Main statements and other documents produced by HRMC as a guide to the
law on taxation are as follows:
▪ Statements of Practice (SP)
▪ Extra-Statutory Concessions (ESC).
▪ Announcements.
▪ Internal Guidance Manuals.
▪ Explanatory Publications.
The Tax Year:
• Tax years for individuals runs from 6 April to the following 5 April.
o E.g., TY 2021-22 began on 6 April 2021 and ended on 5 April 2022.
o TY are also referred to as fiscal years or years of assessment.
• Tax years for a corporation runs from 1 April to the following 31 March and is
identified by the year in which it begins.
o E.g., the financial year referred to as FY 2021 began on 1 April 2021 and
ended on 31 March 2022.
MAN3102
Module Schedule
https://surreylearn.surrey.ac.uk/d2l/le/lessons/241346/topics/2624240
Module Lecturer
Lecturer: Jacqueline McCartney
Office: 66MS02
Email:
Module Textbook
Taxation Finance Act 2022, Alan Melville, 28th Edition, Pearson
Module Assessment
• Mid-Term Assessment:
o Weighting: 30%.
o Content: Weeks 1-5.
o Time: 1 Hour.
o When: Week 7.
o How: In Person.
• Final:
o Weighting: 70%.
o Content: Weeks 1-11.
o Time: 2 Hours.
o When: TBC
o How: In Person.
o Consists of:
▪ Section A:
• Compulsory Question on Corporate Tax (30 Marks).
• Prepare by doing Weeks 8 & 9 Questions and Week 12
Revision Questions.
▪ Section B:
• 3 Questions Worth 20 Marks Each.
o Select two.
• On the Taxation of individuals, covering IT, CGT, VAT and
Inheritance Tax.
• Prepare by doing the remaining weeks questions from the
module.
Week 1
Introduction to the UK Tax System and Income Tax
Week 1 SBS on Demand
Week 1- Q2.5 Ivan
, Total (£) Non-Savings Savings Income Dividends (£)
Income (£) (£)
Part-Time Salary 17,055 17,055
Net Interest Gilt 1,700 1,700
Securities
Dividends 15,560 15,560
Total Income 34,315
Less: Personal 12,570 12,570
Allowance
Taxable Income 21,745 4,485 1,700 15,560
Net Gilt Interest = £1,360 * (100/80) = £1,700
The Premium bond prize is exempt from income tax.
PA = 100% if Total Income is below £100,000
Income Tax Due: Type of Rate Amount Rate Taxable Amount
Non-Savings Income : Basic Rate 4,485 @20% 897.00
Savings Income : Starting Rate 515 @0% 0.00
: Nil Rate 1,000 @0% 0.00
: Basic Rate 185 @20% 37.00
Dividend Income : Nil Rate 2,000 @0% 0.00
: Ordinary Rate 13,360 @8.75% 1,186.50
21,745
Tax Liability 2,120.50
Less: Tax Deducted at Source (£1,700 - £1,360) 340.00
Tax Payable 1,780.50
Week 1- Q2.6 Mary
Total (£) Non-Savings Dividends (£)
Income (£)
Business Profits 26,930 26,930
Rents Received 3,750 3,750
Dividends 124,460 124,460
Total Income 155,140 30,680 124,460
, Less: Personal 0 0
Allowance
Taxable Income 155,140 30,680 124,460
Personal Allowance for the Year = £nil.
Income Tax Due Type of Rate Amount Rate Tax Due
Non-Savings Income : Basic Rate 30,680 20% 6,136.00
Dividends Income : Nil Rate 2,000 0% 0.00
: Ordinary Rate 5,020 8.75% 439.25
: Upper Rate 112,300 33.75% 37,901.25
: Additional Rate 5,140 39.35% 2,022.59
155,140
Tax Liability 46,499.09
Ordinary Rate Band Left After Non-Savings Income = 37,700 – (30,680 + 2,000) = 5,020
Upper Rate Band Left After NSI = (150,000 – 37,700) = 112,300
Additional Rate Band (Remaining) = 124,460 – (2,000 + 5,020 + 112,300) = 5,140
Week 1 Reading
Chapter 1: Introduction to the UK Tax System:
UK Taxes:
• Direct Taxes (DT):
o Are charged on income, profits, or other gains and are either deducted at
source or paid directly to the tax authorities.
o The main direct taxes which are payable by individuals are IT and CGT and
inheritance tax.
o The main direct tax payable by companies is corporation tax.
o All of these DTs are administered by HM Revenue and Customs (HMRC),
which was formed in April 2005.
o National Insurance contributions, which can also be regarded as a firm of
direct taxation, are administered by the NICs and Employer Office of HMRC.
• Indirect Taxes (IDT):
o Are taxes on spending.
o They are charged when a taxpayer buys an item and are paid to the vendor as
part of the purchase price of that item. It is then the vendor’s duty to pass
the tax on to the tax authorities.
o The IDTs include value added tax (VAT), stamp duty, custom duties and the
excise duties levied on alcohol, tobacco and petrol.
o The only IDT considered in this book is VAT, which is also administered by
HMRC.
Sources of Tax Law (No Single Source of UK Taxation Law):
• Statute Law:
o The basic rules of the UK tax system are embodied in a number of tax
statutes or Acts of Parliament.
o The main statutes currently in force for each tax are as follows:
, Tax Statute Abbreviation
Income Tax Capital Allowances Act 2001 CAA 2001
Income Tax Act 2007 ITA 2007
National Insurance Social Security Contribution SSCBA 1992
and Benefits Act 1992
Capital Gains Tax Taxation of Chargeable TCGA 1992
Gains Act 1992
Inheritance Tax Inheritance Tax Act 1984 IHTA 1984
Corporation Tax Taxation of Chargeable TCGA 1992
Gains Act 1992
Capital Allowances Act 2001 CAA 2001
Corporation Tax Act 2009 CTA 2009
Corporation Tax Act 2010 CTA 2010
Value Added Tax Value Added Tax Act 1994 VATA 1994
o These statutes are amended each year by the annual Finance Act, which is
based upon the Budget proposals put forward by the Chancellor of the
Exchequer.
• European Union Law:
o Member states of the EU do not adopt a common tax system but must
implement EU Directives, some of which are concerned with taxation
(principally VAT).
o Much of the UK VAT law falls within the EU Directives of which the UK tax
system was based around and therefore remains even after the UK has left
the EU.
• Case Law:
o Disagreements over the interpretation of the tax acts.
o Resulting in thousands of tax cases that have been brought before the courts.
o The decisions made by judges in these cases form part of an important part
of the tax law of the UK.
• Statements Made by the Tax Authorities:
o Main statements and other documents produced by HRMC as a guide to the
law on taxation are as follows:
▪ Statements of Practice (SP)
▪ Extra-Statutory Concessions (ESC).
▪ Announcements.
▪ Internal Guidance Manuals.
▪ Explanatory Publications.
The Tax Year:
• Tax years for individuals runs from 6 April to the following 5 April.
o E.g., TY 2021-22 began on 6 April 2021 and ended on 5 April 2022.
o TY are also referred to as fiscal years or years of assessment.
• Tax years for a corporation runs from 1 April to the following 31 March and is
identified by the year in which it begins.
o E.g., the financial year referred to as FY 2021 began on 1 April 2021 and
ended on 31 March 2022.
