Preparing Business Tax Computations
Unit summary
This unit is about preparing tax computations for businesses and completing the relevant tax retuns. The first learning outcome requires you to prepare capital allowances computations, including adjustments for private use by the owners of a business. In the second learning outcome you must prepare assessable business income computations for partnerships and self-employed individuals. This includes identifying the National Insurance Contributions payable. The third learning outcome is concerned with preparing capital gains computations for companies and unincorporated businesses. The final learning outcome requires you to prepare Corporation Tax computations for UK resident companies. 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 & Customs in an open and constructive manner, give timely and constructive advice to business 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: The Business Environment: 1. The duties and responsibilities of the tax practitioner; 2. The issues of taxation liability; 3. Relevant legislation and guidance from the HM Revenue & Customs. Taxation Principles and Theory: 4. Basic law and practice relating to all issues covered in the assessment criteria; 5. Availability of types of capital allowance: first year allowance, writing down allowance, balancing allowance and charge (relevant to industrial buildings and plant and machinery including computers, motor vehicles and short life assets); 6. Treatment of capital allowances for unincorporated businesses including private use adjustment; 7. Adjustment of trading profits and losses for tax purposes; 8. Regulations relating to disallowed expenditure such as business entertaining, bad debt write-offs and provisions, private expenditure and capital expenditure; 9. Basis of assessment of unincorporated businesses; 10. Basic allocation of income between partners; 11. Identification of business assets disposed of including part disposals; 12. Calculation of gains and losses on disposals of business assets including indexation allowance; 13. Capital gains exemptions and reliefs on business assets including rollover relief and taper relief but excluding retirement relief; 14. Rates of tax payable on gains on business assets disposed of by individuals; 15. The computation of profit for Corporation Tax purposes including income, capital gains and charges; 16. Calculation of Corporation Tax payable by starting, small, large and marginal companies including those with associated companies; 17. Set-off trading losses incurred by companies (continued below)
Simple Merge:
NOS: (continued from above)
18. Calculation of National Insurance Contributions payable by self-employed persons and employers of non contracted-out employees; 19. Self assessment including payment of tax and filing of returns for unincorporated businesses and companies. The Organisation: 20. How the taxation liabilities of an organisation are affected by its legal structure and the nature of its business transactions; 21. The organisation's legal structure and its business transactions
Based on AOSG Level 4 in Accounting Unit 18
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. Prepare capital allowances computations |
18.1.A Classify expenditure on capital assets in accordance with the statutory distinction between capital and revenue expenditure
18.1.B Ensure that entries and calculations relating to the computation of capital allowances for a company are correct
18.1.C Make adjustments for private use by self-employed individuals and individuals within partnerships
18.1.D Ensure that computations and submissions are made in accordance with current tax law and take account of current HM Revenue & Customs practice
18.1.E Consult with HM Revenue & Customs staff in an open and constructive manner
18.1.F Give timely and constructive advice to clients on the maintenance of accounts and the recording of information relevant to tax returns
18.1.G Maintain client confidentiality at all times |
| 2. Compute assessable business income |
18.2.A Adjust trading profits and losses for tax purposes
18.2.B Make adjustments for private use by self employed individuals and individuals within partnerships
18.2.C Divide profits and losses of partnerships amongst partners
18.2.D Apply the basis of assessment for unincorporated businesses in the opening and closing years
18.2.E Identify the due dates of payment of Income Tax by unincorporated businesses, including payments on account
18.2.F Identify the National Insurance Contributions payable by self-employed individuals
18.2.G Complete correctly the self-employed and partnership supplementary pages to the Tax Return for individuals, together with relevant claims and elections, and submit them within statutory time limits
18.2.H Consult with HM Revenue & Customs staff in an open and constructive manner
18.2.I Give timely and constructive advice to sole traders on the maintenance of accounts and the recording of information relevant to tax returns
18.2.J Give timely and constructive advice to self employed individuals and partnerships on the maintenance of accounts and the recording of information relevant to tax returns
18.2.K Maintain client confidentiality at all times |
| 3. Prepare capital gain computations |
18.3.A Identify and value correctly any chargeable assets that have been sold
18.3.B Identify and value correctly any chargeable assets that have been gifted
18.3.C Identify and value correctly any chargeable assets that have been lost
18.3.D Identify and value correctly any chargeable assets that have been destroyed
18.3.E Identify shares disposed of by companies
18.3.F Calculate chargeable gains and allowable losses
18.3.G Apply rollover relief, deferrals and exemptions correctly
18.3.H Apply relief for gifts, deferrals and exemptions correctly
18.3.I Ensure that computations and submissions are made in accordance with current tax law and take account of current HM Revenue & Customs practice
18.3.J Consult with HM Revenue & Customs staff in an open and constructive manner
18.3.K Give timely and constructive advice to clients on the maintenance of accounts and the recording of information relevant to tax returns
18.3.L Maintian client confidentiality at all times |
| 4. Prepare corporation tax computations |
18.4.A Enter adjusted trading profits and losses, capital allowances, investment income and capital gains in the Corporation Tax computation
18.4.B Set-off and deduct loss reliefs for trade losses and charges correctly
18.4.C Set-off and deduct non-trade losses and charges correctly
18.4.D Calculate Corporation Tax due, taking account of marginal relief
18.4.E Identify and set-off Income Tax deductions and credits
18.4.F Identify the National Insurance Contributions payable by employers
18.4.G Identify the amount of Corporation Tax payable and the due dates of payment, including payments on account
18.4.H Complete Corporation Tax returns correctly and sumit them, together with relevant claims and elections, within statutory time limits
18.4.I Consult with HM Revenue & Customs staff in an open and constructive manner
18.4.J Give timely and constructive advice to clients on the maintenance of accounts and the recording of information relevant to tax returns
18.4.K Maintain client confidentiality at all times |