Exam technique and fundamental technical issues for Advanced Taxation - United Kingdom (ATX (UK))

Part 1 of 4

This is the Finance Act 2018 version of this article. It is relevant for candidates sitting the ATX (UK) exam in the period 1 June 2019 to 31 March 2020. Candidates sitting ATX (UK) after 31 March 2020 should refer to the Finance Act 2019 version of this article (to be published on the ACCA website in 2020).

This article emphasises the importance of two areas of examination technique and outlines 11 fundamental technical issues. The advice on examination technique will help you to use your time in the exam more efficiently and to maximise the marks obtained. The technical issues are important in that they are part of the foundation on which answers can be constructed such that they cover as many of the relevant issues as possible.

This article makes no attempt to be comprehensive; there are other important examination techniques and, of course, a vast number of technical rules that may be examined. Instead, the techniques and issues highlighted here are particularly significant in that they will assist you to maximise your marks in the exam.

There is more guidance on examination technique and technical issues in the examiner’s report published after each exam. There are also many further articles available on the ACCA website on both technical matters and exam technique.

This article is relevant to students who are beginning their studies for ATX (UK) as it provides guidance on the approach they need to take in the exam and, therefore, the approach they should be taking whilst studying. It is also relevant in the period immediately prior to the exam as it emphasises fundamental issues to consider when answering exam questions.

Exam technique

1. Answer the question
Marks are available in the exam for answering the question. They are not given for other parts of an answer, regardless of how well they are written or how technically correct they are. Consequently, it is necessary to determine precisely what you have been asked to do and then to make every attempt to do it without doing anything else. There will be sufficient time in the exam provided you do not allow yourself to be sidetracked.

Think about the best way of satisfying the requirements and relate your approach to the time available (by reference to the number of marks). Work your way through the tasks in an organised and consistent manner.

Pay attention to the verb used in the requirement.

  • ‘State’: there is no need to give any reasons for the statements you make
  • ‘Explain’: requires you to give reasons for your statements. Explanations must be in the form of words or a combination of words and numbers. It will depend on what is being explained.
  • ‘Calculate’: does not require explanations, although explanations may be specifically requested in respect of certain aspects of the calculations.

Explaining tax implications is not easy and needs to be practised. Practising will improve your ability to make a point in a clear and precise manner. It is likely that there will only be one mark for each particular point that you make – so you must think first in order to make the point in one or two sentences.

You should not think of a question as being about a particular technical area: if you do there is the possibility that you will answer the question in too narrow a manner. For example, where a question includes a group of companies, one of which has made a loss, it is not helpful to think of the question as being a ‘group relief’ question. This is because there may be marks available for many other technical areas, for example, single company loss relief, inter group transfer of assets, transfer pricing, VAT and so on.

Also, if a question is thought of as relating to a technical area, there can be a temptation to write about that area in great detail when such detail is not part of the requirement. Your answer should focus on the specific issues and facts of the question and you should avoid generalising.

Accordingly, rather than thinking of a question as being about a technical area you should see it as being about a set of circumstances and a series of requirements that relate to those circumstances. You should take the time necessary to understand the circumstances and to determine how best to satisfy the requirements.

2. Stop... and think
Imagine a client coming into your office and setting out a relatively involved scenario for you with facts and figures. You would not read the paperwork and then immediately explain the tax implications. Instead, having read the paperwork, you would think about it before explaining some of the implications. Then perhaps you would think some more before explaining one aspect in more detail and so on. You should behave the same way in the exam.

The thinking gives you time to be clear as to the facts of the question and what you have been asked to do. It then gives you the chance to identify as many of the relevant implications as possible and the various aspects of each of the implications such that you maximise the marks scored. By thinking before you write you should also avoid covering irrelevant matters that will not score marks.

In the next part of this article we will begin our review of the 11 fundamental technical issues.

The comments in this article do not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content of this article as the basis of any decision. The author and the ACCA expressly disclaims all liability to any person in respect of any indirect, incidental, consequential or other damages relating to the use of this article.

Written by a member of the ATX (UK) examining team