Pearson BTEC Level 5

HNC/D Diploma in Business

Taxation
EXTRA Guidelines 11th August 2016
These extra notes relevant to this assessment are intended to help you
produce appropriate responses to the tasks set in this assignment. They
are not intended to give you the answers, but to direct you in the right
direction for a successful submission.
Assignment Brief

As part of the formal assessment for the HNC/D programme you are
required to submit an assignment for each module. Please refer to your
Student Handbook for full details of the programme assessment scheme
and general information on preparing and submitting assignments.
After completing the module you should be able to:
LO1-Understand the duties and responsibilities of the tax practitioner in the UK
tax environment
LO2-Calculate personal tax liabilities for individuals and partnerships
LO3-Calculate corporation tax liabilities for companies
LO4-Calculate the capital gains tax payable for individuals and businesses

The learning outcomes above each have a number of assessment criteria

which must be met. These are itemised at the end of these notes together
with the tasks which are used to assess them.
The learning outcomes and assessment criteria are discussed in more
detail below.

Assignment task scenario

You have been engaged by a professional accounting practice as a trainee
taxation assistant. During your working day there will be a number of tasks for
you to complete.
Assessment criteria associated with each task are indicated, for example,
as 1.1
Student Guidelines
1. You should write this assignment according to the instructions attached to each of
the tasks. There are no formal report requirements and your written notes should
be structured to answer the questions posed. For computational aspects you
should produce an appropriate solution and, where necessary, show your
workings.
2. You should use diagrams and tables of figures where appropriate ensuring that
you reference their source.
3. You should include a reference list and a bibliography using the Harvard
referencing system. You must ensure that the submitted assignment is all your
own work and that all sources used are correctly attributed. Penalties apply to
assignments which show evidence of academic unfair practice. (See Guide to
Unfair Practice in Assessment on the module page on ilearn).
4. It is advised that you write the written elements of your assessment within
approximately 2,500 3,000 words in order for your research and summarising
skills to be developed and for effective time management. You are required to
ensure that the assignment addresses all of the assessment tasks .There is no
penalty for being over the suggested word count, however, in the interests of
good academic practice, assignments submitted with excessive word counts
(e.g. over 3,000 words) may be returned to students and asked to be
reduced before marking.

The word count excludes the title page, reference list and appendices. Where
assessment questions have been reprinted from the assessment brief these will
also be excluded from the word count. ALL other printed words ARE included
in the word count. Printed words include those contained within charts
and tables.
5. Your assignment should be submitted as a single document. For more
information please see the Guide to Submitting an Assignment document
available on the module page on iLearn.
6. You are recommended and encouraged to prepare the numerical analysis
using a computer spreadsheet which is embedded into your submission
document, but this is not essential.
If you choose to support your computations with a separate spreadsheet file, then
this must be emailed to your tutor after you have submitted your main document
to Turnitin. You cannot submit a spreadsheet file to Turnitin.
Do not forget to complete the tax return to support task 1b), available at the end
of the guidance notes and which, when completed, should be copied and pasted
into your final assessment submission document.

Recommended Additional Resources

Textbooks
At present there is no readily available E-book for this course of study.
EBSCO Business Source Complete Online library resource available via
ilearn
Websites

http://www.hops-kotch.com/EdexcelTaxation.html
http://www.theguardian.com/news/datablog/2014/mar/21/budget -2014taxspending-visualised
http://www.hmrc.gov.uk/agents/
http://www.hmrc.gov.uk/manuals/salfmanual/salf211.htm

Learning outcomes and assessment criteria

Assessment Criteria for Pass

To achieve a pass you must meet all of the assessment criteria as stated
below. Failure to cover all of the assessment criteria will result in a referral
grade and you will be required to re-submit your assignment.

Learning
Outcomes/
Assessment
Criteria

Further guidance on completion of your assignment can be found in the

guidance notes which are posted on the group learning space by your
module tutor. For additional support please post questions onto the group
learning space, or email sgreen@arden.ac.uk
LO1 Explain the duties and responsibilities of the tax practitioner
and the UK tax environment. Be able to:
1.1 describe the UK tax environment.

Task 1a)

1.2 analyse the role and responsibilities of the tax practitioner.

Task 1a)

1.3 explain the tax obligations of tax payers or their agents and the
implications of non-compliance

Task 1a)

LO2 Calculate personal tax liabilities for individuals and partnerships

2.1 calculate relevant income, expenses and allowances

Task 1c)

2.2 calculate taxable amounts and tax payable for employed and
selfemployed individuals and payment dates. - Employed Self employed
Task 1c)
Tasks 2a) and 2b)
2.3

complete relevant documentation and returns

Tasks 1a) and 1b)

LO3 Calculate corporation tax liabilities for companies

3.1 calculate chargeable profits

Task 3a)

3.2 calculate tax liabilities and due payment dates

Task 3a)

3.3 explain how income tax deductions are dealt with

Task 3b)

LO4 Calculate the capital gains tax payable for individuals and companies
4.1 identify chargeable assets

Task 1d)

4.2 calculate capital gains and losses

Individuals
- Companies

Task 1d)
Task 3a)

Criteria Met
For tutor use
(you may wish to
use this in your
preparation for
your assignment
submission)

4.3 Calculate capital gains tax payable

Individuals
Companies

Task 1d)
Task 3a)

Assessment Criteria for Merit

To achieve a Merit all of the Pass criteria need to be met, then the tutor
will assess whether you have met the Merit Criteria. Each of the Merit
criteria must have been met at least once within the assignment.
The following statements are examples of how a merit may be achieved, if
you do meet the Merit Criteria by showing you have reached this level in
other ways then credit will be awarded for this. You will need to meet M1,
M2, M3 at least once.
M1 identify and apply strategies to find appropriate solutions
relevant theories and techniques have been applied in terms of
explaining the uk taxation environment, sources of taxable income
and the role of the tax practitioner
problems with more than one variable have been explored an
effective approach to understanding personal and corporate taxation

M1

M2 select/design and apply appropriate methods/techniques

M2

complex information/data have been synthesised and processed in

terms of computing personal and corporate taxation information.
M3 present and communicate appropriate findings
appropriate structure and approach has been used in terms of
presenting personal and business tax computation.

a range of methods of presentation has been used to present

financial information

information is appropriate for familiar and unfamiliar audiences

in terms of the uk tax environment and the role of the tax
practitioner.

Assessment Criteria for Distinction

To achieve a Distinction you have met all of the Pass and the Merit
criteria. Each of the Distinction criteria must be met at least once within
the assignment.
The following statements are examples of how a Distinction may be
achieved, if you do meet the Distinction Criteria by showing you have
reached this level in other ways then credit will be awarded for this. You
will need to meet D1,D2,D3 at least once.

M3

D1 use critical reflection to evaluate own work and justify valid

conclusions
synthesis has been used to generate and justify a valid
conclusion to the complexity of the taxation environment in the
UK
evaluation of personal, business and corporate taxation
liabilities has taken place using defined criteria
D2 take responsibility for managing and organising activities [insert
details]
autonomy/independence has been demonstrated throughout
the complete assessment. The answer will be supplemented
with resources researched beyond those within the study
materials

D1

assignment has been completed fully and on time

D3 demonstrate convergent, lateral and creative thinking

D2

D3

ideas generated and decisions taken

taxation problems have been solved
unfamiliar contexts relating to taxation have been applied

Task 1
As you can see from the above there are nine of the 12 key learning criteria to
meet in this task, which means it is vital that you cover this task well and obtain
feedback from your tutor as indicated in the assessment brief.
The notes you prepare for task 1a) do not need to be lengthy, but they should be
sufficient to inform those readers who have a non-financial background. In this
respect it is necessary to explain the nature and purpose of taxation in the UK,
the various types of taxation, the legislation which covers taxation and the
various methods of assessing and collecting taxation.
You also need to describe the key roles and responsibilities of the tax practitioner
and explain the relationship which exists between interested stakeholders such
as the practitioner, the client and the taxation authorities.
In order to meet assessment criteria 1.3 you need to be able to explain the
obligations of UK taxpayers and potential penalties for non-compliance with these
obligations.
In order to meet assessment criteria 2.3 you need to be able to explain the main
purpose of the three key forms identified, the P60, P45 and P11D

To assist with this task you may initially find the following web sites helpful:
http://www.theguardian.com/news/datablog/2014/mar/21/budget -2014taxspending-visualised
http://www.hmrc.gov.uk/agents/
http://www.hmrc.gov.uk/manuals/salfmanual/salf211.htm

Task 1 b)
This requires you to complete a tax return, using the information supplied for the
sole trader.
When you have completed the tax return, available as a template at the end of
these notes, you should copy and paste it into your main assessment document.

Task 1c)
You are required to produce and present a taxation computation for Jay for the
year to 5 April 2016. This requires you to identify all the items of income and
expenditure which are relevant to the computation and, together with the income
tax rates and allowances given at the end of the task, produce the numerical
statement which arrives at the amount of tax you think the client should have paid
for the tax year and to then compare it with the amount of income tax that has
actually been suffered by deduction from pay.
Task 1d)
For this task it is necessary to identify the nature of the transactions identified in
the scenario and to find a clear explanation of the term chargeable disposal
.
You are then asked calculate the amount of the gain which will be subject to
taxation. Finally, using the taxation rates and allowances govern at the end of the
scenario you must prepare a calculation which shows the amount of tax that the
client will incur in the tax year.
Clearly, a key factor here is to establish the type of tax that is being examined by
the scenario and to make sure you answer the question from the point of view of
an individual (not a company)

Task 2a)
You are required to draft some brief notes which would be suitable to include in a
letter to the trader which explain the amounts of profit which will form the basis of
the Schedule D tax assessments for the two tax years identified.
As you will have discovered from your research there are special rules for the
opening years of businesses of sole trader and partnership businesses. Try to
explain the rules carefully and, if possible, use the financial information given to
indicate precisely how much profit will be taxed in each of the relevant tax years.
You may find the term overlap profit in your research. This is the amount of profit
which can sometimes be assessed in more than one tax year.
Note that is not necessary for you to write the letter to the client.

Task 2b)
Here you are required to produce a numerical tax computation which indicates
how the financial information for the trader in a particular tax year was used to
produce the adjusted profit for taxation purposes.
In order to do this successfully you will need to understand how to treat items of
expenditure included in the business accounts but which are not allowable
expenses for taxation purposes. You will also need to be able to calculate an
annual capital allowance (in this case a writing down allowance) and to
incorporate the allowance within your computation.
Task 3a)
This task commences with the calculation of a capital gain as applicable to
companies, NOT individuals.
In your research you will find that in order to calculate the capital gain, a number
of indexation allowances must be applied to relevant figures as part of the
calculation.

Any capital gain will be incorporated in the organisations corporation tax

computation for the year, but additionally you are required to indicate how the
company would gain tax relief from any capital loss.
You are also required to explain how a companys profits are taxed where the
trading year falls into two different tax years.

Under task 3a) you are required to show your calculation, for the company, of the
amount that will be subject to corporation tax for the corporation tax year
indicated. In order to be successful here you will need to show each component
of the calculation which leads to the amount to be taxed to corporation tax.
Finally you must produce the calculation which indicates the amount of
corporation tax which will be actually payable by the company and to indicate
when the corporation will be required to pay the corporation tax to HMRC.
As part of this final numerical requirement you are given the tax rates to be used
for the corporation tax computation and you must be careful to check if the
company is entitled to any marginal relief.

Task 3b) needs a fairly brief response to explain how the company must account
for the income tax it has deducted from interest payments made to its lenders.
This does not require an explanation of the accountancy entry, but you do need
to state what the company must do with the money it has collected. You do not
need to show a numerical example, but you may wish to discuss, briefly, the
possible personal tax position of a lender who has received an interest payment
from the company, net of tax at 20%.

Appendix to be used as your submission for task 1 b)

Tax Return:

Employment

Tax year 6 April 2015 to 5 April 2016

Name
Jay Cob

Unique Tax Reference (UTR):

9

xx
x

Pay from this employment the total from your P45 or P60
before tax was taken off

UK tax taken off pay

Tips and other payments not on your P60

Benefits in kind as per form P11D

PAYE tax reference of your employer (on your P45/P60)

Your employer's name

SPO Consultancy Ltd

Employment expenses
Business travel and subsistence expenses

Fixed deductions for expenses

Professional fees and subscriptions

Charitable donations under the payroll deduction scheme

Income from UK Savings and Investments

Banks and Building Societies
Amount after tax deducted

Tax deducted