ACCA TAX

Direct Revenue Tax

Income Tax, NIC

Two Ties in UK

Must spend less than 90d in UK to be considered non resident

Responsibilities when a client refuses to disclose irregularities

Advise client on no longer acting, consider reports, respond professionally to professional letter

Adjusted tax rate band when Gift Aid (Net)

Gift Aid/80 × 100

Personal Allowance Reduction

For every £1 over £100000, reduce PA by 50p

Dividends included with Income

Add to income for personal allowance calc, tax liability is calculated separately with a 500 nil rate band

Personal Pension tax band extension

Net Pension/80 × 100

Child Benefit Income Tax

(net income - pension) - 60000 / 200 = %

Married Couple maximum PA transferable

£1260

Taxable Property Income

Payments - Expenses (Insurance, Higher Value Furniture, Decorating) - Loss bf

Self Employment

Contract allows substitute, own equipment, work quoted on a fixed price

Allowable Expenses

Occupational Pension, Payroll Charity Gift, Professional Subscription

Statutory Allowance for Mileage

Allowed Mileage x 45p

Assessable Mileage

Mileage paid - Stat amount

Rented Accommodation (not required for job) Taxable Benefit

Annual Value + (3.75% x (Purchase Price + Improvements - 75000)) - Contribution from Employee

Hybrid Electric Company Car

((List Price - Capital Contr) x Percentage) + Yearly Contribution

Avg Method for Beneficial Loan

((Ls + Le)/2 * Official Rate of Interest ) - Interest Paid

Strict Method

Break loan into periods:

total (x/12 * Ly * 3.75% ) - interest paid

Avg or Strict Method

Choose lowest

Transfer Benefit (Higher of)

Market value when gifted or Original mkt value less annual use benefit

Annual Use Benefits

Market value when provided x Period x 20%

Total Benefit of transferred item

(Transfer Benefit - Employee Contr) + (Current Year annual use benefit)

RTI Late Submissions - 1st in Tax Year

£0 penalty

RTI Late Submission - 2nd time in Tax Year

Employees

1-9: £100/m

10-49: £200/m

50-249: £300/m

250+: £400/m

Disallowable Expenditure

Repairs of 2nd hand asset where purchase price was lowered to account for required repair

Legal costs on purchase of property

Allowable Pre-Trading Expense

Up to 7yrs pre trading

Advice on labour contracts

Advertising costs

Capital allowance on car

NOT capital expenses

Disallowable Expenses

Depreciation

Personal legal fees

Tax adjusted trading profit

Add back disallowable expenses, deduct capital allowances

Cash Basis

Don’t include receivables and payables

Mileage - remove allowable mileage (45p)

Plant & Machinery

Fixtures that help carry out trade, AIA applies

Office furniture, moveable partition, machinery, water heating system

Not Plant & Machinery

False ceilings, window shutter

SBA - Structures and Building Allowance

Qualifying Expense = Cost - Land Cost

SBA = QE x 3% x Period

Capital Allowance on firm or individuals assets

Deducted BEFORE allocating profits

Partner leaves partnership

Carry forward for set off against future profits is NOT available to partner

Individual is both Employee + Employer

Class 1 Employee + Class 1 Employer

NIC on Benefits

Class 1A

Self employed v employee NI

Self employed pays slightly less

Annual Employment Allowance

Not all employers can claim ie when director is the only employee

payment on account

Not required if more than 80% of tax was deducted at source (PAYE). And balance is less than £1000.

PENALTIES

Late submission of income tax return

Not retaining records for a sufficient amount of time

Failure to notify HMRC of chargeability to income tax

INTEREST (as penalty)

Late payment of Income Tax

Max amount of time that HMRC can raise a discrepancy assessment

20 years

Tribunal Categories

Paper Track

Basic Track

Complex Track

Standard Track

Maximum amount of pensions with incurring annual allowance charge

Unused pension allowance form prior 3 yrs or from first instance of pension (<3yrs)

Deductible from employees taxable income

Contribution into employers occupational pension scheme.

Charitable donation made under payroll deduction scheme

Property Income Calculation

Rental Income - Allowable Expenses

Allowable expenses: if it doesn’t improve property. Don’t deduct mortgage interest.

Positive profit = taxable income

Negative profit = loss carried forward

Income tax when sole income is from property and interest expenses given

Work out income tax liability and deduct 20% of interest payment (relief)

Main Pool

Equipment and low emission cars

18%

Special Pool

integral features + high emission cars

AIA - Annual Investment Allowance

100% tax relief immediately on assets

Class 1 NIC

Employees

Class 1 and Class 1A

Employers

1 - Salary

2 - Benefits

Class 4

Self Employed

Payment Due Date for Income Tax Return

Balancing Payment/Correction

31 Jan 27

31 Jan 28

Payment on Account considers

Income tax and NIC

<1000 for year then no PoA

Self Assessment Return Dates

31 Oct 2026 Paper

31 Jan 2027 Online

Appeals Procedure

1. Write to HMRC within 30 days of decision

2. HMRC will hold an internal review within 45 days

3. First Tier Tribunal - if still unresolved after 30 days of HMRC review conclusion. Independent of HMRC and less formal

4. Upper Tribunal - if both parties still disagree, on a point of law

5. Higher Courts (Supreme court or Court of Appeal)

Determination

Issued when taxpayer fails to submit a tax return on time. Usually set high to encourage compliance

Can’t be appealed but can be superseded by filing the actual tax return

Notify HMRC of new business/commencement of trade

5 October following start of trade

Balancing Payment Late Penalty

1 month - 5%

6 months - further 5% (total 10%)

12months - further 5%

Self assessment deadline for Amendment

31 Jan 2027

Self assessment deadline for compliance check

10 Aug 2026