Guidance on answering Section A questions in Advanced Taxation - United Kingdom (ATX-UK) (P6)

Part 2

In the first part of this article we considered the importance of time management and the requirement. We are now going to look at a past exam question and a suggested approach to take when answering Section A questions.

Illustration – Question 1 from the September/December 2015 sample exam

  • There are 35 marks equating to 68 minutes available. If we assume that it has taken seven minutes to read the question, there are 61 minutes remaining. Although there are 35 marks, only 31 of them related to particular requirements, the other four are professional marks. Accordingly, there are 1.96 minutes per mark available.
  • The question is in two main parts, (a) and (b), with part (a) split into three parts.
  • The detailed requirements are in the email from the manager.
  • Part (a)(i) is the largest task and should take 29 minutes. Due to the size and nature of this task, it would be easy to allow it to overrun the time available. It is important that this is not allowed to happen.
  • The question requires the completion of a table of figures having claimed loss relief in the most beneficial manner. The answer should also include explanations of the options available to relieve the loss.
  • The first thing to do was to calculate the taxable trading profit for the first two tax years if demand is weak. The figures for strong demand were provided in the question and should not have been reworked.
  • The tax computations in respect of strong demand were very easy and should have been dealt with as briskly as possible – there is no need to prepare formal income tax computations. The model answer deals with strong demand in a couple of short sentences.
  • Weak demand produced a loss in the first tax year. The question requires an explanation of the options available and the loss to be used in the most beneficial manner. These instructions were intended to be helpful; it is much easier to identify the most beneficial relief once all of the options have been identified.
  • Once the tax payable/refundable had been worked out it was then necessary to fill in the table.
  • The answer to the whole of this part needed to be brief. It all had to be done in less than half an hour.
  • Part (a)(ii) was for four marks so had to be done in less than eight minutes.
  • The second paragraph of the manager’s email needed to be analysed into two parts; the arrangements which indicate self-employment and the changes to be made to the other arrangements in order to maximise the likelihood of the salesmen being treated as self-employed.
  • Answers to this part needed to be specific and not a generic list of factors. With four marks available it would have been reasonable to assume that four brief points would be sufficient.
  • Part (a)(iii) was a standard question on confidentiality. The only possible mistake which can be made here is writing too much. Keep all of your answers brief.
  • Part (b) was for seven marks so had to be done in less than fourteen minutes.
  • You should recognise that it is much more straightforward than part (a)(i) as it does not require any planning or thought in advance. It was simply necessary to identify and explain the errors and then to calculate Jonny’s inheritance.
  • To score well across the whole question it was necessary to get to part (b) with sufficient time available because this part of the question was the easiest one in which to pick up marks.

Suggested approach to a Section A question

The following is a suggested series of steps to carry out in order to complete a Section A question in the correct amount of time, such that you will maximise the number of marks obtained. You should practise questions and adapt this approach until you find a series of steps that works for you.

  1. Use the total number of marks to determine the number of minutes available and write down the time at which you must have completed your answer to the question.
  2. Read the formal requirements at the end of the question. The formal requirements may include information that you will find useful when you come to read the question relating to the nature of the documents to be prepared and the taxes involved.
  3. Read the question from the beginning. Make a note (ideally only one or two words) in the margin by each paragraph/section to remind you of what it is about and highlight key figures and dates. This will help you find the information you need in the question when you come to write your answer.
  4. Once you have read the question, calculate how much time you have remaining. This will enable you to determine how much time to spend on each part of the question. For example, if the question is for 35 marks (68 minutes) and seven minutes have elapsed so far, then you have 61 minutes to complete your answer. Because only 31 of the marks relate to particular requirements, this equates to 1.96 (61/31) minutes per mark.
  5. So, if Part (a) is for 11 marks, it will need to be completed in 21.5 minutes. Think about how you will carry out the tasks in Part (a) in that time. Identify the relative size of the tasks, split the time between them and get them done in the time. Keep looking at your watch to push yourself along.
  6. Repeat step 5 for the remaining parts of the question such that you finish it in the time.

In the next part of this article we will look at some particular approaches to calculations that may be useful when answering Section A questions and the importance of question practice.

Written by a member of the ATX-UK (P6) examining team