53619335 acca f6 interim assessment ans j11

ACCA

Paper F6

Taxation June 2011

Interim Assessment – Answers

To gain maximum benefit, do not refer to these answers until you have completed the interim assessment questions and submitted them for marking.

PAPER F6 (UK) : TA XA TION (FA2010)

2 KAPLAN PUBL ISHI NG

© Kaplan Financial Limited, 2010

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INTERI M ASSESSMEN T ANSWERS

KAPLAN PUBL ISHI NG 3

1 JOSEPH AND SEPHORA KENT

Key answer tips

Part (a) is a good test of the basics of business income tax with capital allowances and opening year rules. It is important to note that the opening period is 15 months long and the effect this has on the AIA and the writing down allowances in the capital allowances computations.

Part (b) tests some important areas of personal income tax, particularly the calculation of car and fuel benefits and the restriction of the PA for high incomes.

Note that question 1 in the exam often tests both the rules for the self employed and employees.

(a) Income tax assessable amounts

Tax year Basis of assessment £ 2010/11 Actual

(1.10.10 − 5.4.11) £19,060 (W1) × 6/15

7,624

2011/12 12 months ended 31.12.11 £19,060 (W1) × 12/15 15,248

2012/13 CYB: y/e 31.12.12 (W1) 80,420 2013/14 CYB: y/e 31.12.13 (W1) 86,184

Overlap profits (1.1.11 − 5.4.11): £19,060 × 3/15 = £3,812

Tutorial note:

When calculating the assessable amounts for a tax year, it is important to follow the correct sequence of workings.

1. Adjust the profits for disallowable items for each accounting period – this step has already been done for you.

2. Calculate the capital allowances for each accounting period.

3. Deduct the capital allowances for each accounting period from the appropriate adjusted profit for each period.

4. Then allocate the ‘adjusted profits after capital allowances’ into each tax year using the basis of assessment rules.

Workings

(W1) Net adjusted profits for each accounting period

Adjusted profit

Capital allowances (W2)

£ £ £ 15 months to 31.12.11 147,375 (128,315) 19,060 Year ended 31.12.12 83,705 (3,285) 80,420 Year ended 31.12.13 86,800 (616) 86,184



(W2) Capital allowances computation

Pool P.U Car 1

P.U. Car 2

B.U.

Total Allowances

£ £ £ £ £ 15 months to 31.12.11 Additions (no AIA): Car 1 – CO2 111 – 160 g/km 12,200 Additions (with AIA): Trailer 2,500 Plant and machinery 100,000 Van 26,000 –––––––

128,500 Less: AIA (Max) (Note)

(125,000)

125,000

––––––– 3,500 Less: WDA (20% × 15/12) (875) 875 Less: WDA (20% × 15/12) (3,050) x 80% 2,440 ––––– –––––

TWDV c/f 2,625 9,150 ––––––– Total allowances 128,315 ––––––– y/e 31.12.12 Addition (no AIA): Car 2 – CO2 > 160 g/km 13,000 Disposal – Car 1 (7,000) ––––– 2,150 Balancing allowance (2,150) x 80% 1,720 Less: WDA (20%) (525) 525 Less: WDA (10%) (1,300) x 80% 1,040 ––––– ––––– –––––– TWDV c/f 2,100 Nil 11,700 ––––– Total allowances 3,285 ––––– y/e 31.12.13 Disposal proceeds (2,420) ––––– (320) Balancing charge 320 (320) Less: WDA (20%) (1,170) x 80% 936 ––––– ––––– –––––– TWDV c/f Nil Nil 10,530 ––––– ––––– –––––– ––––– Total allowances 616 –––––



Tutorial note:

1. Capital allowances on new car purchases are calculated based on the CO2 emissions of the car as follows:

CO2 emissions of < 111 g/km: eligible for a FYA of 100%.

CO2 emissions of between 111 – 160 g/km: put in main pool, eligible for a WDA at 20%.

CO2 emissions of > 160 g/km: put in the special rate pool, eligible for a WDA at 10%.

Private use cars are however given a pool of their own and the WDA must be calculated in full and deducted from the tax written down value, but only the business proportion is included in the total allowances for the period.

The appropriate rates of WDA above are given in the tax rates and allowances.

2. Purchases of plant and machinery qualify for the AIA and the balance is eligible for the WDA of 20%.

However, the maximum AIA is scaled up for the 15 month period to £125,000 (£100,000 x 15/12). Additions in excess of the maximum AIA are eligible for the WDA of 20%.

3. The WDAs must also be scaled up for the 15 month period.

(b) Sephora Kent

Income tax computation – 2010/11

£ Salary 93,000 Car benefit (W1) 4,110 Fuel benefit (W1) 3,780 Beneficial loan (W2) 1,050 ––––––– Total income (= Net income) 101,940 Less: Adjusted PA (W3) (5,752) ––––––– Taxable income 96,188 ––––––– Income tax

£ 37,894 × 20% Extended basic rate band (W4) 7,579 58,294 × 40% 23,318 –––––– 96,188 –––––– ––––––

Income tax liability 30,897 ––––––



Tutorial note:

There is no need for a columnar layout to the income tax computation as Sephora’s only source of income is her employent income, she does not have any savings or dividend income.

Workings

(W1) Car and fuel benefit

CO2 emissions of 162 g/km, available all year

% Basic % for petrol car 15 Plus: (160 – 130) 1/5 6 ––– Appropriate percentage 21 ––– £ Manufacturer’s list price 25,000 Less: Capital contribution (see Note below) (4,000) –––––– 21,000 –––––– Car benefit (£21,000 × 21%) 4,410 Less: Contribution towards provision of car (£25 x 12) (300) –––––– 4,110 –––––– Petrol benefit (£18,000 × 21%) 3,780 ––––––

Tutorial note:

When working out the car benefit, the list price is reduced by any capital contribution, up to a maximum of £5,000.

Contributions towards the running cost of the car are deducted from the car benefit.

(W2) Beneficial loan

Benefit (£60,000 × (4.00% − 2.25%)) £1,050 ––––––

Tutorial note:

When an employee is given a beneficial loan the benefit is the interest on the loan at the official rate (which is given in the tax rates and allowances) less interest actually paid.



(W3) Adjusted personal allowance

£ £ Basic personal allowance 6,475

Net income 101,940 Less: Gross Gift Aid (£395 × 100/80) (494) –––––– Adjusted net income 101,446 Less : Income limit (100,000) ––––––– 1,446 ––––––– 50% × £1,446 (723) ––––– Adjusted PA 5,752 –––––

Tutorial note:

The personal allowance is gradually reduced for individuals with income in excess of £100,000.

Where the taxpayer’s adjusted net income (ANI) exceeds £100,000, the PA is reduced by: 50% × (ANI – £100,000)

The ANI is calculated as follows: £ Net income X Less: Gross Gift Aid donations (X) Less: Gross personal pension contributions (X) ––– Adjusted net income X ––– Where ANI exceeds £112,950 (£100,000 + (2 × £6,475)) there will be no PA available.

(W4) Extended basic rate band

£ Basic rate band 37,400 Plus: Gross Gift Aid donation (£395 x 100/80) 494 –––––– Extended basic rate band 37,894 ––––––



ACCA marking scheme Marks (a) 2010/11 basis of assessment 1.0 2011/12 basis of assessment 1.0 2012/13 basis of assessment 0.5 2013/14 basis of assessment 0.5 Overlap profits 1.0 Capital allowances Addition of car 0.5 Addition of pool items 1.0 AIA × 15/12 1.0 WDA × 15/12 1.0 Private use 1.0 Disposal of car = balancing allowance 1.0 Private use 0.5 WDA for year ended 31.12.12 1.0 Private use 0.5 Sale of pool expenditure 0.5 Balancing charge on pool 1.0 WDA on car 1.0 Private use 0.5 Summary of adjusted profits after capital allowances 1.5 _____

16.0 –––––

(b) Salary 0.5 Car benefit: List price less capital contribution 1.0 × 21% 1.0 Fuel benefit 1.0 Beneficial loan 1.0 Personal allowance 1.5 Tax liability 1.0 Extend basic rate band re Gift Aid 2.0 _____

9.0 –––––

Total 25.0 –––––



2 HUMPHREY

Key answer tips

A question requiring a full income tax computation with various sources of income.

Detailed knowledge of assessable benefits is important for the exam and this question includes all the common benefits.

Parts (b) and (c) have 6 marks for national insurance calculations. These are relatively easy marks to obtain so these sections should not be ignored.

(a) Income tax computation – 2010/11

Total Other income

Savings Dividends

£ £ £ £ Employment income (W1) 40,100 40,100 Pension 5,000 5,000 Trading income 13,000 13,000 Treasury interest (gross) 500 500 Bank interest (£720 × 100/80) 900 900 Dividends (£54 × 100/90) 60 60 –––––– –––––– ––––– ––––– Total income 59,560 58,100 1,400 60 Less: PA (6,475) (6,475) –––––– –––––– ––––– ––––– Taxable income 53,085 51,625 1,400 60 –––––– –––––– ––––– ––––– Income tax Other income – Basic rate 37,400 × 20% 7,480

– Higher rate 14,225 × 40% 5,690 –––––– 51,625 Savings 1,400 × 40% 560 Dividends 60 × 32.5% 19 –––––– 53,085 –––––– –––––– Income tax liability 13,749 Less: Tax suffered at source

Dividends (10% × £60) (6) Bank interest (20% × £900) (180) PAYE (£5,000 + £1,000) (6,000) ––––––

Income tax payable 7,563 ––––––


1 0 KAPLAN PUBL ISHI NG

Tutorial note:

1. Where there are several sources of income, it is advisable to use the columnar layout for income tax computations to ensure that you deduct the personal allowance from the correct source and calculate the tax on each source correctly.

2. Note that the question asks for income tax payable (not liability); so any tax already paid must be deducted from the tax liability figure.

Always check whether it is the tax liability or tax payable that is asked for in the question.

3. Treasury stock interest is received gross. Therefore, do not gross up the interest before inclusion in the taxable income computation and do not deduct any tax suffered at source in the income tax payable computation.

Workings

(W1) Employment income

£ £ Salary 19,000 Car benefit (W2) 5,800 Fuel benefit (W2) 5,220 Use of assets (£400 × 20%) 80 Accommodation benefit (W3) 8,000 Beneficial loan (£50,000 × 4%) 2,000 Mobile phone Exempt –––––– 21,100 –––––– Employment income 40,100 ––––––

Tutorial note:

The use of tools is assessed at 20% of the market value of the assets when first made available.

The beneficial loan benefit is calculated at the official rate of interest on the loan outstanding during the year less any interest paid. As the loan is interest free and there were no repayments during the year, the benefit is just (£50,000 x 4%).



(W2) Car and fuel benefit CO2 emissions of 185 g/km, available all year

% Basic % for diesel car 18 Plus: (185 – 130) × 1/5 11 –––––– Appropriate percentage 29 –––––– Car benefit (£20,000 × 29%) £5,800 –––––– Fuel benefit (£18,000 × 29%) £5,220 –––––– No relief for partial contribution.

Tutorial note:

No relief is given for contributions towards the cost of fuel unless all private fuel is paid for by the employee.

(W3) Accommodation benefit

Basic charge £ Higher of: (i) annual value £3,000 (ii) rent paid by employer Nil 3,000 Expensive accommodation (£200,000 – £75,000) × 4% 5,000 –––––– Benefit 8,000 ––––––

(b) Class 1A NIC – 2010/11

£ Employment benefits (as above) 21,100 –––––– Class 1A NIC (£21,100 x 12.8%) 2,701 ––––––

(c) National insurance – self employed income – 2010/11

£ Class 2 NIC (£2.40 × 52 weeks) 125 Class 4 NIC (£13,000 – £5,715) × 8% 583 –––– Total self employed NICs 708 ––––



ACCA marking scheme Marks (a) Salary 0.5 Trading income 1.0 Pension from former employer 1.0 Benefits: Company car list price × % 1.0 29% working 1.0 Fuel benefit 1.0 No contribution 1.0 Use of assets 1.0 Accommodation benefit – annual value 1.0 Accommodation benefit – additional charge 1.0 Beneficial loan 1.0 Mobile phone – exempt 1.0 Treasury stock interest gross 1.0 Grossing up bank interest 1.0 Grossing up dividends 1.0 Personal allowance 0.5 Tax liability 2.0 Tax deducted for PAYE 0.5 Tax deducted for pension 0.5 Tax paid on interest 0.5 Tax paid on dividends 0.5 _____

19.0 –––––

(b) Benefits – 0.5 mark each to a max of 2.0 NIC charge at 12.8% 1.0 _____

3.0 –––––

(c) Class 2 NIC 1.0 Class 4 NIC on trading income 2.0 _____

3.0 –––––

Total

25.0 –––––

3 REGINALD

Key answer tips

This question asks for a calculation of property income and includes all the usual complications including treatment of repairs, a lease premium received, furnished lettings and treatment of losses.

Note that it is not necessary to calculate the profit or loss separately on each property as it is the total of rents less expenses that is assessable.

Sometimes however it may be easier to prepare a summary as shown in the tutorial note at the end.



Property business income – 2010/11

£ Rental income: House 1 Expired lease (£4,000 × 3/12) 1,000 New lease (£5,000 × 3/12) 1,250 House 2 New lease (£4,000 × 6/12) 2,000 House 3 Expired lease (£3,000 × 6/12) 1,500 New lease Nil House 4 6,000 –––––– 11,750 Assessment on premium received – House 2 (W1) 1,760 –––––– 13,510 Less: Allowable deductions Repairs (£2,000 House 1 + £2,500 House 3) (4,500) Expenses (House 4) (7,000) Wear and tear allowance (W2) (520) –––––– Property business income assessment 1,490 ––––––

Tutorial note:

1. House 1 – Re-decoration costs are allowed in full.

2. House 2 – Roof repairs are not allowable as they are deemed to be capital in nature, making good a deficiency on purchase which was reflected in the purchase price.

3. House 3 – Re-decoration costs are allowed as clearly incurred wholly and exclusively for the letting business.

4. House 4 – The £2,000 loan interest allowable as an expense of the letting business.

5. As the income and expenses of all properties are aggregated, any losses arising on the rental of a property are automatically offset against other property profits in the same year. If there is an overall property loss, the loss can only be carried forward and set against future property income.

Workings

(W1) House number 2 – assessment on premium received

£ Premium received 2,000 Less: 2% × (7 − 1) × £2,000 (240) ––––– Assessable premium 1,760 –––––



Tutorial note:

An alternative method of calculating the assessment on the premium received:

= £2,000 × (51 – 7) / 50 = £1,760

(W2) House number 4 – Wear and tear allowance

£ £ Rents received 6,000 Less: Water rates (200) Council tax (600) ––––– 5,200 × 10% 520 ––––– ––––

Tutorial note:

An alternative presentation of answer is shown below, however this is not the method used in the examiner’s examination answers.

House 1 House 2 House 3 House 4 Total £ £ £ £ £ Rent receivable 2,250 2,000 1,500 6,000 11,750 Premium assessable − 1,760 − − 1,760 Repairs (2,000) − (2,500) − (4,500) Expenses − − − (7,000) (7,000) W & T allowance − − − (520) (520) ––––– ––––– ––––– ––––– ––––– 250 3,760 (1,000) (1,520) 1,490 ––––– ––––– ––––– ––––– –––––

The assessable amount for 2010/11 will be £1,490

ACCA marking scheme Marks House 1 rental income 1.0 Re-decoration 0.5 House 2 rental income 1.0 Lease premium 1.0 Roof repairs 1.0 House 3 rental income 1.0 Re-decoration 1.0 House 4 rental income 0.5 Wear and tear allowance 1.0 Loan interest 1.0 Total amount assessable 1.0 _____

10.0 –––––



4 COWALSH LTD

Key answer tips

This question requires a straightforward calculation of the corporation tax liability, with calculations of capital allowances and industrial buildings allowance.

You also need to understand the treatment of capital losses brought forward.

Tutorial note:

When calculating the corporation tax liability, it is important to follow the correct sequence of workings.

1. Calculate capital allowances for both industrial buildings and plant and machinery.

2. Deduct the capital allowances from the adjusted profit to give the trading profits figure.

3. Calculate the assessable amounts for other sources of profits (e.g. interest income and chargeable gains).

4. Deduct Gift Aid donations paid in the period to calculate the taxable total profits.

5. Calculate the FII and Augmented profits to determine the appropriate rate of tax to apply.

6. Calculate the corporation tax liability accordingly.

Corporation tax computation – y/e 31 March 2011

£ Trading profit 2,300,000 Capital allowances – IBA (W1) (3,600)– P & M (W2) (143,250)

–––––––– Taxable trading profit 2,153,150 Interest income (W3) 81,500 Net chargeable gains (W4) Nil –––––––– Total profits 2,234,650 Less: Gift Aid (5,000) –––––––– Taxable total profits 2,229,650 –––––––– Corporation tax liability (W5) @ 28% 624,302 –––––––– Capital losses carried forward to set against future chargeable gains: (£30,000 − £25,000) (W4) 5,000 ––––––––



Workings

(W1) Industrial Buildings Allowance

£ Manufacturing area 240,000 Canteen 30,000 Design office 90,000 General office (Note) 130,000 ––––––– Total cost excluding land 490,000 Less: General office (Note) – non-qualifying (130,000) ––––––– Qualifying expenditure 360,000 ––––––– WDA = (£360,000 × 1%) 3,600 –––––––

Tutorial note:

The cost of the general office is more than 25% of the original cost of the unit excluding land (£130,000/£490,000 = 26.5%) and is not eligible for IBA.

The WDA for the period to 31 March 2011 is therefore only calculated on £360,000.

(W2) Capital allowances – plant and machinery

£

General pool

£

Short life asset

£

Allowan-ces £

TWDV b/f 190,000 4,000 Transfer to general pool (Note 1) 4,000 (4,000) –––––– Nil –––––– Additions (No AIA): Car (111–160 g/km) (Note 2)

18,000

Additions (With AIA): Plant and machinery

112,500

From “Repairs” (Note 3) 8,750 ––––––– 121,250 Less: AIA (Maximum) (100,000) 100,000 ––––––– 21,250 Disposals (£9,000 + £8,000) (17,000) –––––– 216,250 WDA (20% × £216,250) (43,250) 43,250 ––––––– TWDV c/f 173,000 –––––– –––––––Total allowances 143,250 –––––––



Tutorial note:

1. The short life asset is transferred to the general pool on 1 April 2010 as the asset is not sold within four years of the end of the accounting period in which purchased (i.e. year ended 31 March 2006).

2. There are no private use adjustments for a company. The car therefore does not have a separate column and goes into the general pool as the CO2 emissions are between 111 –160 g/km.

3. Capital assets charged in the income statement are added back in the adjustment of profits computation. If they then qualify as plant and machinery for capital allowance purposes, they will be eligible for the allowances in the normal way.

(W3) Interest income

£ Bank interest receivable 1,500 Loan note interest receivable 80,000 –––––– 81,500 ––––––

(W4) Chargeable gains

£ Chargeable gains for year 25,000 Less: Capital losses brought forward (25,000) –––––– Net chargeable gains assessable in year Nil ––––––

Tutorial note:

Capital losses can only be set against chargeable gains in the period and any excess capital losses are carried forward and set against future chargeable gains only.

(W5) Corporation tax liability

As taxable total profits and therefore augmented profits are clearly over the £1,500,000 upper limit, the main rate of corporation tax will apply.

The dividend received from the overseas company is exempt from corporation tax, but would form part of FII as it is not from an associated company.

Key answer tips

Make sure that you show the examiner that you have considered whether or not the 'augmented profits' exceed the £1.5 million limit, even where it obviously has.



ACCA marking scheme Marks Trading profit before CAs 0.5 IBA – qualifying expenditure 1.5 IBA – WDA 0.5 Plant and machinery CAs: TWDV b/f 0.5 Short life asset transfer 1.0 Addition – car no AIA 0.5 Additions qualifying for AIA – machine 0.5 Additions – treatment of repairs 0.5 AIA – maximum 1.0 Disposals 0.5 WDA 1.0 WDA – no private use 0.5 Correct use of trade loss 1.0 Interest income 1.0 Chargeable gain 0.5 Correct use of capital loss 1.0 Stating capital loss carried forward 1.0 Gift Aid 0.5 Overseas dividend recognised as FII 0.5 Corporation tax liability 1.0 _____

15.0 –––––

5 TONY NASH

Key answer tips

This question is wide ranging and includes an adjusted profit computation, capital allowances, an income tax computation and a few marks for administration issues.

Adjusted profit computations are always popular in exams.

Note the requirement to include all items, even those which do not require adjustment which should be shown with a zero. These instructions must be followed in the exam, or else full marks cannot be obtained and easy marks will be lost.



(a) Tax adjusted trading profit – year ended 5 April 2011

£ £ Net profit 16,660

Depreciation 2,244 Motor expenses (£8,330 × 30%) (W2) 2,499 Accountancy 0 Financial planning advice 527 Debt collection 0 Fees for planning permission 2,210 Replacement hard drive (Note 1) 0 New printer (Note 1) 340 Business travel 0 Entertaining suppliers (Note 2) 408 Entertaining employees 0 Excessive salary (£13,600 – £10,200) (Note 3) 3,400 Staff present 0 Health club subscription 603 Donation to political party 51 Trade subscription 0 Use of office (£3,468 × 1/6) 578 Private telephone (£576 × 25%) 144 Own consumption (Note 4) 808 Capital allowances (W1) 3,526 _________ _________ 29,750 4,248 (4,248) _________ _________ Tax adjusted trading profit 25,502 _________

Tutorial notes:

1. The replacement hard drive is allowable since the whole computer is not being replaced and the expenditure is therefore treated as revenue expenditure.

The new printer is not allowable in the adjustment of profits computation, being capital in nature. However, capital allowances are available on the cost of the printer.

2. The only exception to the non-deductibility of entertainment expenditure is when it is in respect of employees.

3. A salary to a family member must not be excessive. Since Tony’s wife is paid £3,400 more than the other sales assistants, this amount is not allowable.

4. Goods for own consumption are valued at selling price. As no entries have been made in the accounts, an adjustment must be made for the full selling price.

If the goods had been correctly removed from the accounts at cost, only the profit element would need to be adjusted for in the adjustment of profits computation.

.



Workings

(W1) Capital allowances computation

Pool Exp car B.U. Allowances £ £ £ £ TWDV b/f 6,290 13,770 Additions with AIA Printer (Note 1) 340 Less: AIA (340) 340 –––– Nil WDA (20%) (1,258) 1,258 WDA (20%) (Note 2) (2,754) × 70% 1,928 ––––– ––––– TWDV c/f 5,032 11,016 ––––– ––––– ––––– Total allowances 3,526 –––––

Tutorial notes:

1. The new printer is not allowable in the adjustment of profits computation, but is eligible for capital allowances as plant and machinery eligible for AIA.

2. The expensive car is eligible for the normal 20% WDA, subject to a maximum claim of £3,000. The maximum is not applicable in this question as the normal allowance falls below £3,000.

(W2) Private mileage

Total Private Business miles miles miles Total mileage 17,000 Holiday (2,125) 2,125 –––––– Balance 14,875 2,975 11,900 –––––– –––––– –––––– 5,100 11,900 –––––– –––––– % of total mileage (5,100/17,000); (11,900/17,000) 30% 70%



(b) Income tax computation – 2010/11

Total Other income

Savings Dividends

£ £ £ £ Trading income (as (a) above) 25,502 25,502 Dividends (£4,500 × 100/90) 5,000 5,000 Government stock interest 3,000 3,000 NS&I interest 2,900 2,900 ISA interest Exempt –––––– –––––– ––––– ––––– Total Income 36,402 25,502 5,900 5,000 Less: PA (6,475) (6,475) –––––– –––––– ––––– ––––– Taxable income 29,927 19,027 5,900 5,000 –––––– –––––– ––––– –––––

Income tax: Other income 19,027 × 20% 3,805 Savings 5,900 × 20% 1,180 Dividends 5,000 × 10% 500 –––––– 29,927 –––––– –––––– Income tax liability 5,485 Less: Tax suffered

Dividends (10% × £5,000) (500) –––––– Income tax payable 4,985 ––––––

Tutorial note:

1. Government interest and National Savings interest is received gross. They therefore should not be grossed up and there is no tax suffered at source to deduct in the income tax liability computation.

2. Income from ISAs is exempt from income tax.

3. Note that full marks can be obtained in this part even if your answer to part (a) is incorrect, provided you bring forward the figure you calculated into this computation and deal with it correctly.

(c) Retention of business records

• The business records for 2010/11 must be retained until 31 January 2017, being five years after the filing date of 31 January 2012.

• As Tony is in business during 2010/11, he must retain the records relating to the investment income until the same date.

• A failure to retain records can result in a penalty of up to £3,000. However, the maximum penalty will only be charged in serious cases.



Tutorial notes:

Note that self assessment is very important in the examination and the rules must be learnt!

ACCA marking scheme

Marks (a) Depreciation 1.0 Motor expenses re private use 1.0 Accountancy 0.5 Personal planning advice 0.5 Debt collection 0.5 Planning permission 0.5 Replacement hard drive 0.5 New printer 0.5 Business travel 0.5 Entertaining suppliers 0.5 Entertaining employees 0.5 Excessive salary to family member 1.0 Staff present 0.5 Club subscription 0.5 Donation to political party 0.5 Trade subscription 0.5 Use of office 1.0 Private telephone re business use 1.0 Own consumption 1.0 Capital allowances WDA 20% 0.5 Car WDA 20% plus private restriction 1.0 Additions for AIA 1.0 AIA at 100% 1.0 _____

16.0 –––––

(b) Trading income 0.5 Dividends – grossed up 1.0 Government stock – not grossed up 1.0 NS&I interest – not grossed up 1.0 ISA interest – exempt 0.5 Personal allowance 0.5 Income tax – other income 0.5 − savings and dividend 0.5 Tax suffered – dividends 0.5 _____

6.0 –––––

(c) Business records – retention 1.0 Other records – retention 1.0 Consequence of non-retention 1.0 _____

3.0 –––––

Total

25.0 –––––

53619335 acca f6 interim assessment ans j11

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