Relevant to Foundations in Taxation (FTX) (UK) – June and December 2014 sittings
This article outlines the effects of the changes made in the Finance Act 2013 on Paper FTX (UK). The sub-headings refer to the headings in the main article on Paper F6 (UK) (see 'Related links').
General anti-abuse rule
This rule will not be examined in Paper FTX (UK).
Residence
The rules regarding residence remain outside the Paper FTX (UK) syllabus and will not be examined.
Rates of income tax
The revised thresholds and the rates of tax shown will also be used in Paper FTX (UK). The use of the 10% rate for savings income is examinable.
Personal allowance
Only the personal allowance for taxpayers born after 5 April 1948 is examinable in Paper FTX (UK). The withdrawal of the allowance for high earners and the effect of personal pension plan contributions and gift aid on the calculation of net income are also examinable.
The higher age related allowances and the income limit for these are not examinable and will not be given in the Paper FTX (UK) rates and allowances sheet.
Child benefit income tax charge
This will not be examined in Paper FTX (UK).
Company car benefit and car and van fuel benefit
Paper FTX (UK) will examine the same detail as for Paper F6 (UK).
Childcare
This continues to be examinable in Paper FTX (UK).
Official rate of interest
The official rate of 4% will be used in Paper FTX (UK) for the June and December 2014 exams.
Luncheon vouchers and cycle to work days
These areas will not be examined in Paper FTX (UK).
PAYE – real time reporting
A basic knowledge of PAYE administration is part of the Paper FTX (UK) syllabus therefore these rules will be examinable with the exception of fines which remain outside the syllabus.
Paper FTX (UK) will examine the same detail as for Paper F6 (UK). This includes the restriction on annual investment allowance (AIA) and writing down allowances (WDA) for short periods but not for periods straddling 1 January 2013. Similarly, as a result of the reduced CO2 emission thresholds for cars, questions will not be set involving the thresholds for periods before 1 April 2013.
Leased motor cars
Paper FTX (UK) will examine the same detail as for Paper F6 (UK).
This will not be examined in Paper FTX (UK).
This will not be examined in Paper FTX (UK).
Detailed knowledge of these remains outside the Paper FTX (UK) syllabus but knowledge of income from ISAs being non-taxable is examinable.
Awareness of the annual allowance and lifetime allowance limits is required but the additional tax charges for excess contributions and for exceeding the lifetime allowance are not examinable. The method of obtaining tax relief for contributions to both occupational and personal schemes remains examinable.
The new carry forward provisions will not be examined in Paper FTX (UK).
Rates of corporation tax
The rates of tax and the upper and lower limits will be given in the rates and allowances sheet for Paper FTX (UK) in the same format as for Paper F6 (UK) and will remain examinable. However, no question will be set that involves an accounting period straddling 1 April 2013 where two different tax rates would apply.
Annual exempt amount
The new limit of £10,900 for the tax year 2013–14 will also be used in Paper FTX (UK).
Rate of capital gains tax
The 18% and 28% rates will continue to be applied in Paper FTX (UK).
No capital gains tax questions will be set which involve the effects of pension contributions and gift aid payments on the income tax thresholds.
The rates and limits will be given in the rates and allowances sheet in Paper FTX (UK) in the same format as for Paper F6 (UK).
Entrepreneurs’ relief
The rate of tax (10%) and the £10 million lifetime limit is required knowledge for Paper FTX (UK).
Employee shareholders
This exemption is not examinable in Paper FTX (UK).
This remains outside the syllabus for Paper FTX (UK).
Class 1 and class 1A NIC
The new rates and thresholds will also be used in the June and December 2014 examinations for Paper FTX (UK). Where NIC is required to be calculated on a weekly or monthly basis the thresholds should be divided by 52 or 12 respectively.
Class 2 and class 4 NIC
The same detail will be used in the June and December 2014 exams for Paper FTX (UK).
Registration and deregistration limits
The new registration and deregistration limits will also be used in the June and December 2014 examinations for Paper FTX (UK).
Standard rate of VAT
The unchanged standard rate of 20% will be used in Paper FTX (UK).
Fuel provided for private mileage
Paper FTX (UK) will examine the same rules as in Paper F6 (UK).
Simplified VAT invoices
These will continue to be examinable in Paper FTX (UK).
VAT penalties
Late registration penalties are examinable but other penalties remain outside the syllabus for Paper FTX (UK).
As for Paper F6 (UK) the new rules will not be examined in June and December 2014.
Dishonest conduct by tax agents
This area is not examinable in Paper FTX (UK).
Alternative dispute resolution
This area is not examinable in Paper FTX (UK).
Interest on underpaid and overpaid tax
The calculation of this remains outside the syllabus for Paper FTX (UK).
Written by a member of the Paper FTX (UK) examining team