The 'Taxation' paper introduces candidates to the subject of taxation and provides a foundational understanding of the underlying principles and major technical areas of taxation as they apply to individual and business activities.
Keep reading if you have a Taxation (TX) exam coming up, are thinking about enrolling, or want to know how to retake it.
Before we begin, it's important to understand that there are numerous ACCA Taxation papers available, including the UK paper, Ireland paper, Malaysian paper, and so on.
These are specific to the country in which you are studying and the applicable tax laws. We'll be referring to the TX-UK Paper in this guide, but the advice is applicable to all tax students.
You have the option of selecting the exam you will take based on the country and tax laws that are most relevant to your profession. More information on the ACCA variant exams can be found here.
Overview
The Taxation syllabus is designed to introduce you to the tax system and
provide you with a foundational understanding of the underlying principles
and technical areas, as well as how they affect individual and business
activities.
The syllabus covers a variety of taxes that an accountant must be familiar
with in-depth. This includes calculating tax liabilities, explaining
calculations, adhering to regulations, and planning for businesses and
individuals in a variety of scenarios.
Taxation is an ACCA applied skills subject, and the skills learned here will
help you succeed in the Strategic Professional subject
Advanced Taxation
later on (if you choose it).
As a result, while studying for the TX course, it's critical to lay a
solid foundation of knowledge.
TX Exam Format
The format of the Applied Skills papers is the same. They are all graded
using Computer Based Exams (CBEs), and you have three hours to complete the
exam after reading the CBE instructions for up to ten minutes. The pass mark
for this exam, like all others in the ACCA qualification, is
50%.
The TX exam is divided into three sections, each with a set of
mandatory questions. The following is a breakdown of these:
- Section A: There are 15 Objective Test (OT) questions, each worth two points, for a total of 30 points. These can come from any subject on the curriculum.
- Section B: Contains three OT Case Scenarios, each with five questions worth two points and a total of 30 points. These can come from any area of the curriculum.
This means that 60% of the paper can come from any topic on the syllabus, so
not covering the entire course could cost you a lot of points on the exam.
Consider this: if you don't cover a topic that appears in five different
questions in an OT Case Scenario, you risk losing ten points right away –
not the best way to begin the exam!
- Section C: The Constructed Response section contains one 10-point question and two 15-point questions. These questions will usually require an application to a scenario and will include a mix of calculations, explanations, and discussion.
Syllabus Guide
The goal of the Taxation syllabus, as previously stated, is to develop
knowledge and skills related to the tax system and be able to apply them to
individuals, single companies, and groups of companies.
The ACCA outlines six main capabilities that candidates should be
able to do after passing this exam in order to achieve this goal:
- Explain the tax system's operation and scope, as well as taxpayers and/or their agents' obligations and the consequences of noncompliance.
- Explain and calculate individual income tax liabilities, as well as the impact of national insurance contributions (NIC) on employees, employers, and self-employed people.
- Explain and calculate the chargeable gains that result from individuals' actions.
- Individuals' inheritance tax liabilities are explained and computed.
- Explain and calculate the tax liabilities of individual businesses and groups of businesses.
- Explain and calculate the impact of VAT on both incorporated and unincorporated businesses.
Taxation Exam Study Tips
#1 – Give yourself 12 weeks to prepare
The exams at the Applied Skill level require a deeper understanding of the
content in order to tailor your knowledge to various scenarios.
This necessitates not only a thorough understanding of the theory but also a
significant amount of question practice in order to improve your application
skills, so we recommend dedicating a full 12-week study cycle to it.
This enables you to follow our recommended study plan, which includes 8
weeks of content review and learning through question walkthroughs, allowing
you to complete the full syllabus as noted above; and 4 weeks of exam
technique practice through our mock exams, exam preparation resources,
webinars, and Revision Bootcamp.
Having a structured study plan in place will provide you with a solid
foundation of knowledge as well as excellent exam technique, increasing your
chances of passing the paper.
#2 – Cover the full syllabus
The two 15-mark constructed response questions will be about income tax and
corporation tax, according to the examiner, so make sure you are
particularly strong in these areas. These can also be found in the OT
questions.
However, income tax and corporation tax alone will not get you a pass
because the exam is all compulsory questions and section A and B, as well as
the ten-mark question section C, can come from any area of the syllabus;
therefore, having broad knowledge is necessary for success.
So, in order to give yourself the best chance, you should practice questions
from a wide range of topics, as this will provide you with the strongest
foundation of knowledge to tackle whatever exam you are given on the day.
#3 – Don’t ignore the OT’s
As previously stated, the OTs account for 60% of the exam, making it
impossible to pass without doing well in this section. This type of question
necessitates a thorough understanding of the material as well as numerous
practice questions.
Fortunately, we've included practice questions after each video so you can
check your understanding. Even if you're practicing longer form questions,
make sure you're aware of the technical aspects of the solution because
these could lead to OT questions.
Always read the OTs requirements carefully and consider the format in which
your answer must be presented, especially when calculations are involved. To
simulate the exam experience, try practicing OT questions and Cases under time
constraints.
#4 Practice makes perfect
There is no getting around the fact that the only way to grasp new concepts
in the TX syllabus is to practice questions.
As a result, practice, practice, the practice should be the cornerstone of
your studies. It's the only way you'll be able to comprehend the underlying
principles and technical aspects of the various taxes, as well as apply them
using the scenario's key data.
Tax calculations frequently follow a Pro-forma template, so mastering it
will make approaching calculations much easier. It will be easier for the
marker to see how a figure from the workings fits into the main calculations
if the structure and layout are good.
Also, keep in mind any other information you need to provide alongside the
company, such as payment deadlines or penalties for late payments, possible
exemptions or reliefs, or any other planning considerations.
Don't be discouraged if this seems difficult at first; remember that you learn
more from your mistakes than from your successes, so even if you struggled
with a question, review the solution, go back and review the content as
needed, and then try the question again to see if you understand what was
required. If you continue to approach questions in this manner, you will gain
a solid understanding of both the content and how it is assessed.
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