Preparing Personal Taxation Computations
Unit summary
This unit is about preparing tax computations and returns for individuals. It is concerned with the Income Tax and Capital Gains Tax liability of employed individuals and also of self-employed individuals excluding any calculation of their business income. The first learning outcome requires you to calculate income from employment, including benefits in kind. In the second learning outcome you must calculate property and investment income and show that you apply deductions and reliefs and claim loss set-offs. The third learning outcome is concerned with preparing Income Tax computations, based on your calculations of the client's earned and unearned income. The final learning outcome requires you to prepare Capital Gains Tax computations. As well as calculating chargeable gains and losses, you need to show that you apply reliefs and exemptions correctly. Throughout the unit you must show that you take account of current tax law and HM Revenue & Customs practice and make submissions within statutory timescales. You also need to show that you consult with the HM Revenue and Customs in an open and constructive manner, give timely and constructive advice to clients and maintain client confidentiality.
Unit details
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15 Business, Administration and Law
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15.1
Accounting and Finance
Assessment Methodology: Independent assessment of at least 3 hours duration is mandatory for this unit, OR, if NVQ, work-based evidence
You must have knowledge and understanding of:
1. The duties and responsibilities of the tax practitioner (LOs 19.1, 190.2, 19.3, 19.4)
2. The issues of taxation liability (LOs 19.1, 19.2, 19.3, 19.4)
3. Relevant legislation and guidance from the HM Revenue & Customs (LOs 19.1, 19.2, 19.3, 19.4)
4. Basic law and practice relating to all issues covered in the assessment criteria (LOs 19.1, 19.2, 19.3, 19.4)
5. Calculation of assessable employment income including benefits in kind (LO 19.1)
6. Expenses deductible from Schedule E Income including pension contributions and payroll giving to charities (LO 19.1)
7. Classification and calculation of income as property income, savings or dividend income (LO 19.2)
8. Identification of the main tax exempt investments (LO 19.2)
9. Calculation and set-off of rental deficits (LO 19.2)
10. Computation of taxable income taking account of gift aid payments and personal allowances for taxpayers aged under 65 (LO 19.3)
11. Calculation of tax on general, savings and dividend income (LO 19.3)
12. Identification of non-business assets disposed of including part disposals and personal shareholdings (LO 19.4)
13. Calculation of gains and losses on disposals of non-business assets including indexation allowance (LO 19.4)
14. Set-off of capital losses, taper relief and annual exemption to arrive at taxable gains (LO 19.4)
15. Calculation of capital gains tax payable on gains on non-business assets disposed of by individuals (LO 19.4)
16. Self assessment including payment of tax and filing of returns by individuals (LOs 19.3, 19.4)
17. How the taxation liabilities of individuals are affected by their employment status (LOs 19.1, 19.2, 19.3, 19.4)
18. An understanding of the individual's employment status (LOs 19.1, 19.2, 19.3, 19.4)
Simple Merge:
NOS: Based on AOSG Accounting Unit 19
Other: no text found
FSSC have formally supported this qualification (please see letter of support attached in the qualification need / support section).
| Learning Outcome |
Assessment Criteria |
| 1. Calculate income from employment |
19.1.A Prepare accurate computations of emoluments received by UK resident employees relating to work performed wholly or partly in the UK
19.1.B Prepare accurate computations of benefits in kind for lower paid employees
19.1.C Prepare accurate computations of benefits in kind for higher paid employees
19.1.D List allowable expenses including contributions to pension schemes and deductions
19.1.E List allowable expenses including contributions to charities under the payroll giving scheme
19.1.F Record relevant details of income from employment accurately and legibly in the tax return
19.1.G Make computations and submissions in accordance with current tax law and take account of current HM Revenue & Customs practice
19.1.H Consult with HM Revenue & Customs staff in an open and constructive manner
19.1.I Give timely and constructive advice to clients on the recording of information relevant to tax returns
19.1.J Maintain client confidentiality at all times |
| 2. Calculate property and investment income |
19.2.A Prepare schedules of dividends and interest received on shares and securities
19.2.B Prepare schedules of property income for holiday lets and determine profits and losses
19.2.C Prepare schedules of property income for wear and tear and determine profits and losses
19.2.D Prepare schedules of investment income from banks
19.2.E Prepare schedules of investment income from building societies
19.2.F Prepare schedules of investment income from government saving schemes
19.2.G Apply deductions and reliefs and claim loss set-offs
19.2.H Record relevant details of property and investment income accurately and legibly in the tax return
19.2.I Make computations and submissions in accordance with current tax law and take account of current HM Revenue & Customs practice
19.2.J Consult with HM Revenue & Customs staff in an open and constructive manner
19.2.K Give timely and constructive advice to clients on the recording of information relevant to tax retuns
19.2.L Maintain client confidentiality at all times |
| 3. Prepare income tax computations |
19.2.A List general income, savings income and dividend income and check for completeness
19.3.B Correctly calculate and deduct charges and personal allowances
19.3.C Correctly calculate Income Tax payable
19.3.D Record income and payments legibly and accurately in the tax return
19.3.E Make computations and submissions in accordance with current tax law and take account of current HM Revenue & Customs staff in an open and constructive manner
19.3.F Consult with HM Revenue & Customs staff in an open and constructive manner
19.3.G Give timely and constructive advice to clients on the recording of information relevant to tax returns
19.3.H Maintain client confidentiality at all times |
| 4. Prepare capital gains tax computations |
19.4.A Identify and value chargeable personal assets that have been sold
19.4.B Identify and value chargeable personal assets that have been gifted
19.4.C Identify and value chargeable personal assets that have been lost
19.4.D Identify and value chargeable personal assets that have been destroyed
19.4.E Identify shares disposed of by individuals
19.4.F Correctly calculate chargeable gains and allowable losses
19.4.G Apply reliefs and exemptions correctly
19.4.H Correctly calculate Capital Gains Tax payable
19.4.I Record relevant details of gains and the Capital Gains Tax payable legibly and accurately in the tax return
19.4.J Make computations and submissions in accordance with current tax law and take account of current HM Revenue & Customs practice
19.4.K Consult with HM Revenue & Customs staff in an open and constructive manner
19.4.L Give timely and constructive advice to clients on the recording of information relevant to tax returns
19.4.M Maintain client confidentiality at all times |