Kaplan | Exam Tips for paper F5

Specialist cost and management accounting technique

• ABC – this is arguably the most important costing technique and has only
been examined once
• or back- flush accounting has not been examined as yet. This probably won’t be a
whole question but could be combined with, say, target costing

Decision making techniques

• Linear programming
• or relevant costing

Budgeting
• Written question on budgeting, e.g. approaches to budgeting
• Forecasting, including linear regression
Standard costing and variance analysis
• Standard variances and planning and operational variances; calculation
and discussion
• Maybe a short requirement on standard costing, factors to consider
when investigating a variance or variance analysis in modern manufacturing 

Performance measurement
• Transfer pricing
• or ROI/RI
• or a more general question on performance measurement (perhaps with a ‘not
for profit’ organisation
Kaplan | Exam Tips for paper F6
Income tax

 Husband and wife

 Joint investment income
 Some exempt income
 Gift Aid donations extending basic rate band
 Age allowance
 Furnished holiday lettings (treat as trading income)
 Adjustment of profits
 Capital allowances
 National insurance

Corporation tax

 Period straddling 31 March 2008

 Possibly a short period of account
 Capital allowances
 Rental profits with lease premiums
 Quarterly accounting for large companies
 Overseas aspect – DTR

VAT

 Separate part of question 1 or 2 or whole question 4 (as in June 2009)

 VAT return
 Compulsory registration – future test
 Control visit / misdeclaration

Capital gains tax

 Individual making disposals

 Disposal of a business with Entrepreneur’s relief
 Disposal of chattels
 Principal private residence relief
 Part disposal
 Rollover and gift relief

Sundry topics for questions 4 and 5

 Company losses
 Sole trader losses
 Badges of trade
C's ACCA exam tips F6

Paper F6 (UK)

By Colin Channer

This is the seventh exam of the new syllabus. The examiner, David
Harrowven

has established a consistent pattern, although the world pass rate has varied

between 45% and 61%.

This exam is the second occasion in which the provisions of the Finance
Act

2009 are examinable. All the FA 2009 changes are summarised in an article

published in September 2009 Student Accountant magazine. Many of the

main

changes were examined in June 2010, but the following could still be tested
in

December:

(i) the temporary extended carry back relief for trading losses for income
tax

purposes

(ii) the new regulations governing appeals against HMRC assessments.

Other recent articles of note in the Student Accountant are:

(i) November 2009 on the new approach to the calculation of adjusted
trading

profits or losses, which must be followed in all exams;

(ii) April 2010 exam notes which sets out the information which students
will

find attached to the 2010 exam papers

Exam format

 Q1 Income tax (25 or 30 marks)

 Q2 Corporation tax (25 or 30 marks)

 Q3 CGT (20 marks)

 Q4 Any topic

 Q5 Any topic

VAT (minimum 10%; maximum 15%) is examinable in either Q1, Q2, Q4

or

Q5, but usually as part of Q1 or Q2

Q2 can contain up to 10 marks on groups and foreign trading income of a

company, and so far small elements have appeared in each exam; group
loss

relief (Dec 07 5 marks and June 10 3 marks), foreign dividends (June
08
2 marks, Dec 09 8 marks with transfer pricing rules and June 10 1
mark);

associated companies (Dec 08 1 mark); group capital gains (June 09 5

marks)

National insurance contributions a few marks included in income tax or

corporation tax questions

Exam Tips

Income tax topics Q1, (maybe Q4 or Q5)

A possible Q1 could feature a cessation of employment with a

commencement

of self-employment together with a personal income tax computation.

Employment income could feature various benefits (eg motor cars  maybe
a

low CO2 emission car; use of assets where annual benefit is 20% p.a;
transfers

of used assets to the employee; loan interest benefit, use of

accommodation).

The self-employment element could feature trading loss relief in the

opening

years (with s72, ITA 2007 relief).

Other income tax matters due for examination are (i) property income
rules, in
particular the furnished holiday letting rules and rent a room (ii) the PAYE

system and (iii) cessation of a trade, and (iv) relief for pension
contributions

If loss relief does not appear in Q1, a specialist question on relief for a trad

ing

loss of self-employed persons could be featured in Q4 or Q5. Such a

question

would probably cover reliefs applicable in different circumstances,

including th

FA 2009 extended carry back relief

Corporation tax topics Q2, (maybe Q4 or Q5)

A possible Q2 would be a 12 month accounting period straddling 31

March,

with a detailed adjustment of profit and capital allowances. The question

could

also feature a capital gain, perhaps with rollover relief.

Other aspects of corporation tax due for examination are (i) long period of

account rules and (ii) capital gains in a group.

Capital gains tax topics Q3

A capital gains tax computation for a personal taxpayer. Possible gain/ loss

calculations could include any of the following: (i) a disposal of quoted

shares

with a bonus issue; (ii) a company takeover with consideration in shares

and

cash; (iii) a sale of shares in the taxpayers personal trading company or

sale of

a building after the cessation of a trade which was previously used in the

trade, with either disposal attracting entrepreneurs  relief; (iv) a disposal

of a

chattel; (v) loss or destruction of a non-wasting asset with replacement

using

insurance compensation; and (v) disposal of the remainder of an asset after

an

earlier part disposal

VAT topics

Possible aspects could include (i) registration; (ii) deregistration and

disposa

l of

assets of a business to former owner or others, (iii) a calculation of VAT

liabi
lity

for a tax period; (iv) the annual accounting scheme, and (v) default
surcharge

National insurance and tax administration

Class 1 and Class 1A NIC, in conjunction with employment income,

particularly

benefits and PAYE

Tax administration apart from PAYE, the new rules for tax appeals
(relevant

to all taxes)

Exam Technique

Divide your time in proportion to the marks on offer. Try to stick to this
time

allocation. Remember, a question not attempted scores no marks.

Attempt all questions. Although all five questions are compulsory,

candidates

should answer the questions in the order that best suits their knowledge, but

generally it would be inadvisable to make a major question the last one to

be

attempted.

Presentation matters! In particular:

 Apply the computational formats that you have been taught.

 Use workings to avoid complex calculations in your main answer, and

cross-reference them to the face of your answer

 Good presentation helps to avoid mistakes and it makes it easier for the

marker to follow.

In addition to noting the guidance set out above, students should make use
of

ACCA past examination papers, and read the examiner s review of the last

examination session at www.accaglobal.com/students