EXAMINABLE DOCUMENTS – Exams in June 2020 to March 2021

Taxation – United Kingdom (TX-UK) and Advanced Taxation – United Kingdom (ATX-UK)

The following notes refer to Taxation – United Kingdom (TX-UK) and Advanced Taxation –
United Kingdom (ATX-UK) only. Guidance for other variant exams – where available – is
published on the ACCA website.
Examinations falling within the period 1 June to 31 March generally examine the Finance Act
which was passed in the previous July. Exams falling in the period 1 June 2020 to 31 March
2021 will examine the Finance Act 2019 (which received Royal Assent on 12 February 2019).

Finance Acts
The latest Finance Act which will be examined in TX-UK and ATX-UK in examinations falling
within the period 1 June 2020 to 31 March 2021 is the Finance Act 2019.
With regard to prospective legislation where, for example, provisions included in the Finance
Acts will only take effect at some date in the future, such legislation will not normally be
examined until such time as it actually takes effect. The same rule applies to the effective date
of the provisions of an Act introduced by statutory instrument.
Articles
The following relevant articles have been published in Student Accountant and are also
available on the ACCA website:
TX-UK:
• Finance Act 2019
• Examiner’s approach to Taxation – United Kingdom (TX-UK)
• Adjustment of profit questions
• Objective test questions
• Higher skills
• TX-UK – A guide to using the examiner’s reports
• TX-UK – A guide to reflection for retake students

The following articles are updated each year for changes in the Finance Act
• Inheritance tax (Parts 1 & 2)
• Chargeable gains (Parts 1 & 2)
• Value added tax (Parts 1 & 2)
• Groups
• Benefits
• Motor cars

ATX-UK:
• Finance Act 2019
• Examiner’s approach to Advanced Taxation – United Kingdom (ATX-UK)
• Stepping up from TX-UK to ATX-UK
• Passing the ATX-UK exam
• Guidance on answering Section A questions for ATX-UK
• Improving your performance in ATX-UK – in 5 parts
• Exam technique and fundamental technical issues for ATX-UK
• ATX-UK – A guide to using the examiner’s reports
• ATX-UK – A guide to reflection for retake students

The following articles are updated each year for changes in the Finance Act
• Trusts and tax for ATX-UK – in 4 parts
• Inheritance tax and capital gains tax for ATX-UK – in 4 parts
• International aspects of personal taxation for ATX-UK – in 4 parts
• Corporation tax for ATX-UK – in 4 parts
 • Corporation tax– group relief for ATX-UK – in 4 parts
• Corporation tax – groups and chargeable gains for ATX-UK – in 4 parts
• Taxation of the unincorporated business – the new business – in 4 parts
• Taxation of the unincorporated business – the existing business – in 4 parts

Supplementary Instructions and Tax Rates and Allowances

The following supplementary instructions and tax rates and allowances will be reproduced in
the exam in examinations in the period 1 June 2020 to 31 March 2021. The tick () indicates
whether this information is included, and therefore examinable, in TX-UK and ATX-UK. In
addition, other specific information necessary for candidates to answer individual questions will
be given as part of the question.

SUPPLEMENTARY INSTRUCTIONS TX- ATX-

UK UK

1. You should assume that the tax rates and allowances for the tax year 2019/20 and for the financial 
year to 31 March 2020 will continue to apply for the foreseeable future unless you are instructed
otherwise.
2. Calculations and workings need only be made to the nearest £.  
3. All apportionments should be made to the nearest month.  
4. All workings should be shown in Section C. 
5. All workings should be shown. 

Income tax
Normal Dividend  
rates rates

Basic rate £1 − £37,500 20% 7.5%

Higher rate £37,501 to £150,000 40% 32.5%
Additional rate £150,001 and over 45% 38.1%

Savings income nil rate band – Basic rate taxpayers £1,000

- Higher rate taxpayers £500
Dividend nil rate band £2,000

A starting rate of 0% applies to savings income where it falls within the first £5,000 of taxable income.

Personal allowance
£  
Personal allowance 12,500
Transferable amount 1,250
Income limit 100,000

Where adjusted net income is £125,000 or more, the personal allowance is reduced to zero.

Residence status
Days in UK Previously resident Not previously resident  
Less than 16 Automatically not resident Automatically not resident
16 to 45 Resident if 4 UK ties (or more) Automatically not resident
46 to 90 Resident if 3 UK ties (or more) Resident if 4 UK ties
91 to 120 Resident if 2 UK ties (or more) Resident if 3 UK ties (or more)
121 to 182 Resident if 1 UK tie (or more) Resident if 2 UK ties (or more)
183 or more Automatically resident Automatically resident

Remittance basis charge

UK resident for: Charge 
Seven out of the last nine years £30,000
12 out of the last 14 years £60,000

Child benefit income tax charge

Where income is between £50,000 and £60,000, the charge is 1% of the amount of child benefit received 
for every £100 of income over £50,000
Car benefit percentage
The relevant base level of CO2 emissions is 95 grams per kilometre.  

The percentage rates applying to petrol cars (and diesel cars meeting the RDE2 standard) with CO2 emissions
up to this level are:

50 grams per kilometre or less 16%

51 grams to 75 grams per kilometre 19%
76 grams to 94 grams per kilometre 22%
95 grams per kilometre 23%

Car fuel benefit

The base figure for calculating the car fuel benefit is £24,100.  

Company van benefits

The company van benefit scale charge is £3,430, and the van fuel benefit is £655.  

Individual savings accounts (ISAs)

The overall investment limit is £20,000.  

Property income
Basic rate restriction applies to 75% of finance costs relating to residential properties.  

Pension scheme limits

Annual allowance £40,000  
Minimum allowance £10,000  
Threshold income limit £110,000 
Income limit £150,000  

Lifetime allowance £1,055,000


The maximum contribution which can qualify for tax relief without any earnings is £3,600 

Approved mileage allowances: cars
Up to 10,000 miles 45p  
Over 10,000 miles 25p

Capital allowances: rates of allowance

Plant and machinery  
Main pool 18%
Special rate pool 6%

Motor cars
New cars with CO2 emissions up to 50 grams per kilometre 100%
CO2 emissions between 51 and 110 grams per kilometre 18%
CO2 emissions over 110 grams per kilometre 6%

Annual investment allowance

Rate of allowance 100%
Expenditure limit £1,000,000

Cash basis accounting

Revenue limit £150,000  

Cap on income tax reliefs

Unless otherwise restricted, reliefs are capped at the higher of £50,000 or 25% of income.  

Corporation tax
Rate of tax – Financial year 2019 19%  
- Financial year 2018 19%
- Financial year 2017 19%
Profit threshold £1,500,000

Value added tax (VAT)

Standard rate 20%  
Registration limit £85,000
Deregistration limit £83,000
Inheritance tax: tax rates
Nil rate band £325,000 
Residence nil rate band £150,000
Rate of tax on excess – Lifetime rate 20%
– Death rate 40%

Inheritance tax: nil rate bands and tax rates

Nil rate band £ 
6 April 2019 to 5 April 2020 325,000
6 April 2018 to 5 April 2019 325,000
6 April 2017 to 5 April 2018 325,000
6 April 2016 to 5 April 2017 325,000
6 April 2015 to 5 April 2016 325,000
6 April 2014 to 5 April 2015 325,000
6 April 2013 to 5 April 2014 325,000
6 April 2012 to 5 April 2013 325,000
6 April 2011 to 5 April 2012 325,000
6 April 2010 to 5 April 2011 325,000
6 April 2009 to 5 April 2010 325,000
6 April 2008 to 5 April 2009 312,000
6 April 2007 to 5 April 2008 300,000
6 April 2006 to 5 April 2007 285,000
6 April 2005 to 5 April 2006 275,000

Residence nil rate band 150,000

Rate of tax on excess over nil rate band – Lifetime rate 20%
– Death rate 40%

Inheritance tax: taper relief

Years before death: Percentage  
reduction

More than 3 but less than 4 years 20%

More than 4 but less than 5 years 40%
More than 5 but less than 6 years 60%
More than 6 but less than 7 years 80%

Capital gains tax

Normal Residential  
rates property
Rates of tax – Lower rate 10% 18%
– Higher rate 20% 28%

Annual exempt amount £12,000

Entrepreneurs’ relief and investors’ relief
– Lifetime limit £10,000,000
– Rate of tax 10%

National insurance contributions

 
Class 1 Employee £1 − £8,632 per year Nil
£8,633 − £50,000 per year 12%
£50,001 and above per year 2%

Class 1 Employer £1 − £8,632 per year Nil

£8,633 and above per year 13.8%
Employment allowance £3,000

Class 1A 13.8%

Class 2 £3.00 per week

Small profits threshold £6,365

Class 4 £1 − £8,632 per year Nil

£8,633 − £50,000 per year 9%
£50,001 and above per year 2%
Rates of interest (assumed)
Official rate of interest 2.50%  
Rate of interest on underpaid tax 3.25%
Rate of interest on overpaid tax 0.50%

Standard penalties for errors

Taxpayer behaviour Maximum penalty Minimum penalty - Minimum penalty -  

unprompted disclosure prompted disclosure
Deliberate and 100% 30% 50%
concealed
Deliberate but not 70% 20% 35%
concealed
Careless 30% 0% 15%

Stamp duty land tax

Non-residential properties 
Up to £150,000 0%
£150,001 − £250,000 2%
£250,001 and above 5%

Stamp duty
Shares 0.5% 