Taxation (TX UK)

March/
June 2023
Examiner’s report
The examining team share their observations from the
marking process to highlight strengths and
weaknesses in candidates’ performance, and to offer
constructive advice for those sitting the exam in the
future.

Contents
General comments .............................................................. 2
Section A ............................................................................. 3
Example 1 ........................................................................ 3
Example 2 ........................................................................ 4
Example 3 ........................................................................ 5
Example 4 ........................................................................ 6
Section B ............................................................................. 7
Question 1 ....................................................................... 8
Question 2 ....................................................................... 8
Question 3 ....................................................................... 9
Question 4 ..................................................................... 10
Question 5 ..................................................................... 10
Section C ........................................................................... 11
Kazou............................................................................. 11
Requirement (a) – 3 marks ........................................ 11
Requirement (b) – 4 marks ........................................ 12
Requirement (c) – 3 marks ........................................ 13
Hannah .......................................................................... 14
Requirement (a) – 6 marks ........................................ 14
Requirement (b) – 8 marks ........................................ 15
Requirement (c) – 1 mark .......................................... 16
Venus Ltd ...................................................................... 17
Examiner’s report – TX-UK March/June 2023 1
General comments

This examiner’s report should be used in conjunction with the published June 2023
sample exam which can be found on the ACCA Practice Platform.

The Taxation (TX-UK) exam is offered as a computer-based exam (CBE). The model
of delivery for the CBE exam means that candidates do not all receive the same set
of questions. In this report, the examining team provide constructive guidance on
how to answer the questions whilst sharing their observations from the marking
process, highlighting the strengths and weaknesses of candidates who attempted
these questions. Future candidates can use this examiner’s report as part of their
exam preparation, attempting question practice on the ACCA Practice Platform,
reviewing the published answers alongside this report.

• Section A objective test questions – four specific questions from this sitting of
the exam.
• Section B objective test case questions – a detailed review of one case from
this section in the exam.
• Section C constructed response questions – guidance on how to complete all
published constructed response questions from the sample exam.

Examiner’s report – TX-UK March/June 2023 2

Section A

Section A questions aim to provide a broad coverage of the syllabus, and future
candidates should aim to revise all areas of the TX-UK syllabus, rather than
attempting to question spot.

The following four questions are reviewed with the aim of giving future candidates an
indication of the types of questions asked, guidance on dealing with exam questions
and to provide a technical debrief on the topics covered by the specific questions
selected.

Example 1

Ruby was required to make payments on account of £5,000 in total towards her tax
liability for the tax year 2022-23.

She paid both payments on account, of £2,500 each, on 1 July 2023.

After completing her self-assessment tax return for the tax year 2022-23, Ruby
calculates that her tax liability for that year is £7,000.

Ruby pays her balancing payment of £2,000 on 31 January 2024.

How much late payment interest will Ruby have to pay in relation to her tax
liability for the tax year 2022-23?

A. £34

B. £163

C. £81

D. £228

This question tests syllabus area A6(a) Calculate late payment interest and state the
penalties that can be charged.

The correct answer is A £34 (2,500 x 3.25% x 5/12). Ruby’s payments on account
are due on 31 January 2023 and 31 July 2023 with the balancing payment due on 31
January 2024. Therefore, her first payment on account was late by five months (from
31 January 2023 to 30 June 2023, the day before she paid the tax). The rate of
interest on underpaid tax is given to you in the Tax Tables in the exam and is shown
there as 3.25%.

The incorrect answers are:

(2,500 + 2,500) x 3.25% = £163

Examiner’s report – TX-UK March/June 2023 3

2,500 x 3.25% = £81

7,000 x 3.25% = £228

Example 2

Roman died on 1 November 2022.

During June 2019, Roman gave an antique vase to his daughter Petra. The transfer
value for inheritance tax (IHT) purposes at the date of the gift was £400,000 before
any available exemptions.

Roman had made no other transfers during his lifetime.

Drag and drop the correct amounts from the options below to correctly identify
the IHT payable by Petra at the time of the gift in June 2019 and on the death of
Roman in November 2022.

This question tests syllabus area D2(a) Understand the tax implications of lifetime
transfers and compute the relevant liabilities

The correct answers are:

£0 is the IHT payable at the time of the gift in June 2019 since the gift is a potentially
exempt transfer.

£22,080 of IHT was payable by Petra at the time of Roman’s death in November
2022. The gift of £400,000 will have been reduced by the £3,000 annual exemption
for both the tax years 2019/20 and 2018/19 giving a value of £394,000. At the time of

Examiner’s report – TX-UK March/June 2023 4

death in November 2022, being within seven years from the date of the gift, this
amount will be reduced by the available nil rate band of £325,000 thus the value
chargeable to tax becomes £394,000 - £325,000 = £69,000. The rate of tax on this is
40% but this is reduced by taper relief of 20% because the gift was made more than
3 but less than 4 years before death (these rates are given in the Tax Tables in the
exam). Thus, the tax is £22,080 ((69,000 at 40%) less 20%).

The incorrect answers are:

£13,800 being the £69,000 at the lifetime tax rate of 20%

£15,000 with no lifetime allowances and taxed at the lifetime rate ((400,000 -
325,000) at 20%

£24,000 calculated without the lifetime allowances at death rates of 40%, less 20%
taper relief ((400,000 - 325,000) at 40% less 20%)

£27,600 calculated with lifetime allowances but no taper relief given (400,000 - 6,000
- 325,000) at 40%)

Example 3

Flower Ltd is a trading company. Its results for the year ended 31 March 2023
include the following items relating to interest received and paid in the year:

£
Loan interest receivable:
Received in the year 35,000
Accrued at 31 March 2023 5,000
Loan interest payable:
On loan to purchase a fleet of delivery vans (10,000)
On loan to buy shares in an unrelated (8,000)
trading company

What amount of non-trade loan relationship income will be included in Flower

Ltd's calculation of taxable total profits for the year ended 31 March 2023?

£ ____________

This Question tests syllabus area E2(h) Recognise and apply the treatment of
interest paid and received under the loan relationship rules.

The correct answer is 32000. Loan interest receivable will always be non-trade
interest unless the company is in the trade of money lending. The amount which will
be included in the accounts of Flower Ltd for the year to 31 March 2023 will be the
received and accrued amount totalling £40,000. From this figure, the non-trade loan
interest payable will be deducted. The loan to purchase the delivery vehicles is for
trade purposes therefore the amount of £10,000 will be deducted from the trading
profits. However, the loan to buy shares in another company is an investment and is

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not for trading purposes and so this amount will be deducted from the £40,000. The
answer is £40,000 - £8,000 = £32,000.

Example 4

Which TWO of the following taxpayers are most likely to benefit financially
from voluntary registration for value added tax (VAT)?

A. A business which buys standard rated supplies and sells zero rated goods to
members of the public

B. A business which buys zero rated supplies and sells standard rated goods to
members of the public

C. A business which buys zero rated supplies and sells zero rated goods to
members of the public

D. A business which buys standard rated supplies and sells standard rated goods to
other VAT-registered businesses

This question tests syllabus area F1(a) Recognise the circumstances in which a
person must register or deregister for VAT (compulsory) and when a person may
register or deregister for VAT (voluntary).

The correct answer is:

A. A business which buys standard rated supplies and sells zero rated
goods to members of the public, and
D. A business which buys standard rated supplies and sells standard rated
goods to other VAT-registered businesses

Voluntary registration is beneficial for traders who can recover their input VAT and
either make zero rated supplies (so will not have to charge higher prices inclusive of
VAT), or make supplies to other VAT registered businesses (who can recover the
additional cost of the output VAT charged).

A business which buys zero rated supplies and sells standard rated goods to
members of the public, will not benefit by voluntary registration since it will not
recover VAT on its purchases (as these have no VAT being zero rated) and will have
to charge members of the public an extra 20% to recover the VAT on sales.

A business which buys zero rated supplies and sells zero rated goods to members of
the public will not benefit from voluntary registration as there is no VAT to be
charged on sales or recovered on expenses.

Examiner’s report – TX-UK March/June 2023 6

Section B

Example of a case scenario

You should assume today’s date is 20 March 2023.

Mabel, a sole trader, is registered for value added tax (VAT) and is in the process of
completing her VAT return for the quarter ended 28 February 2023. Mabel does not
use the VAT cash accounting scheme.

Outputs
During the quarter ended 28 February 2023, standard rated sales invoices totalling
£98,000 (exclusive of VAT) were issued in respect of credit sales. Mabel offers all of
her customers a 10% discount for payment within 14 days of the date of the sales
invoice, and 60% of customers paid within the 14-day period.

Inputs
During the quarter ended 28 February 2023, standard rated purchase and expense
invoices totalling £35,700 were received. This figure includes £690 for entertaining
UK customers, £1,200 for entertaining overseas customers, and £900 for mobile
telephone calls (of which 20% related to private calls). All of these figures are
inclusive of VAT.

Cessation
Mabel wishes to retire and is therefore going to cease trading on 31 March 2023.
She will deregister for VAT. Mabel is unsure whether she will sell the assets of her
business separately to different purchasers after ceasing to trade, or whether she will
sell the entire business as a going concern on 31 March 2023. During the previous
three years, Mabel has purchased the following non-current assets:

(1) Computer equipment purchased during July 2020 for £4,100 and sold during
November 2022 for £350
(2) A car purchased (for both business and private use) during August 2022 for
£9,600 which Mabel still owns
(3) Office equipment purchased during March 2023 for £7,400 which Mabel still
owns

All of the non-current asset figures are exclusive of VAT.

Examiner’s report – TX-UK March/June 2023 7

Question 1

What is the amount of output value added tax (VAT) payable by Mabel in
respect of her sales for the quarter ended 28 February 2023?
.
A. £18,424

B. £17,640

C. £15,353

D. £19,600

This question tests syllabus area F2(a) Calculate the amount of VAT
payable/recoverable.

The correct answer is A. £18,424 (98,000 x 40% x 20%) + (98,000 x 60% x 90% x
20%) with 60% of customers receiving the 10% discount and VAT calculated on the
exclusive of VAT sales figures.

The incorrect options are:

B. £17,640 (98,000 x 90% x 20%) applying the discount to all sales

C. £15,353 (98,000 x 40% x 20/120) + (98,000 x 60% x 90% x 20/120) treating the
sales figures as if they are inclusive of VAT
D. £19,600 (98,000 x 20%) not applying any discount

Question 2

What is the amount of input value added tax (VAT) recoverable by Mabel in
respect of her purchases and expenses for the quarter ended 28 February
2023?

A. £5,920

B. £5,835

C. £5,805

D. £5,605

This question tests syllabus area F2(g) Recognise the circumstances in which input
VAT is non-deductible.

The correct answer is C. £5,805 ((35,700 - 690 - (900 x 20%)) x 20/120) allowing the
VAT on entertaining overseas customers but not allowing the VAT for entertaining
UK customers or the private element of the telephone calls.

Examiner’s report – TX-UK March/June 2023 8

The incorrect options are:
A. £5,920 (35,700 - (900 x 20%)) x 20/120 which allows all entertaining costs
B. £5,835 (35,700 - 690) x 20/120 which does not disallow the private element of
telephone calls
D. £5,605 (35,700 - 690 - 1,200 - (900 x 20%)) x 20/120 which disallows the
entertaining of overseas customers

Question 3

By what date must Mabel notify HM Revenue and Customs (HMRC) of her
ceasing to make taxable supplies, and what is the earliest date from which her
business can be deregistered for value added tax (VAT)?

A.
Notification: 30 April 2023
Deregistration: 30 April 2023

B.
Notification: 30 April 2023
Deregistration: 31 March 2023

C.
Notification: 31 March 2023
Deregistration: 31 March 2023

D.
Notification: 31 March 2023
Deregistration: 30 April 2023

This question tests syllabus area F1(a) Recognise the circumstances in which a
person must register or deregister for VAT (compulsory) and when a person may
register or deregister for VAT (voluntary).

The correct answer is B. Notification 30 April 2023 and Deregistration 31 March

2023.

HMRC should be notified within 30 days of ceasing to make taxable supplies, and
the VAT registration is cancelled from the date of cessation.

Examiner’s report – TX-UK March/June 2023 9

Question 4

Assuming that Mabel sells the assets of her business separately to different
purchasers, how much output value added tax (VAT) will she have to pay on
her final VAT return, in respect of the non-current assets purchased during the
three years prior to the cessation of trading?

A. £3,400

B. £2,300

C. £2,230

D. £1,480

This question tests syllabus area F2(a) Calculate the amount of VAT
payable/recoverable

The correct answer is D. £1,480 7,400 x 20% being the VAT on the office equipment.
The computer equipment has already been sold and so is no longer held by Mabel
and no VAT will have been claimed on the car, because it is used for both business
and private use.

The incorrect options are:

A. £3,400 (7,400 + 9,600) x 20% for the car and the office equipment
B. £2,300 (7,400 + 4,100) x 20% including the computer equipment at cost
C. £2,230 (7,400 + 4,100 - 350) x 20% including the loss on sale of the computer
equipment

Question 5

What is the advantage for Mabel if she sells her entire business as a going
concern for value added tax (VAT) purposes?

A. No output VAT will be payable in respect of the sale of the business

B. The new owner must take over Mabel's VAT registration

C. The new owner must take over Mabel's outstanding VAT liabilities

D. Mabel will not have to prepare a VAT return for the period 1 to 31 March
2023

This question tests syllabus area F2(i) Understand the treatment of the sale of a
business as a going concern.

A is the correct answer A. No output VAT will be payable in respect of the sale of
the business.

Examiner’s report – TX-UK March/June 2023 10

Section C

Kazou

The 10-mark higher skills question involved Kazou. He was employed at a gross
annual salary of £200,000 (so an additional rate taxpayer) but planned to retire on 5
April 2026. At that point, Kazou’s income will reduce to gross annual pension income
of £55,000 (so a higher rate taxpayer).

Kazuo was going to undertake £40,000 of work on a freelance basis during the year
ended 5 April 2023, and will do this via a new limited company, Zaoku Ltd.

Kazuo was looking at three alternative ways of extracting the profits of Zaoku Ltd:

Alternative 1: After allowing for corporation tax, Kazuo will withdraw the entire net of
tax profits as dividends during the tax year 2022-23.

Alternative 2: Kazuo will be paid gross directors' remuneration of £8,000 and Zaoku
Ltd will make a pension contribution of £32,000 into a company occupational pension
scheme on Kazuo's behalf during the tax year 2022-23.

Alternative 3: The net of tax profits will be left undrawn in Zaoku Ltd until the tax year
2026-27 when Kazuo has retired. He will then withdraw the entire net of tax amount
as dividends in the tax year 2026-27.

Although there were a number of perfect answers, many candidates found this
question quite challenging. One particular problem was that candidates did not
appreciate that part (c) was essentially the same as part (a), but set a few years ahead
with a lower tax rate. This future setting confused a significant minority of candidates,
with a number calculating income and taxes over several years. However, the question
clearly stated that the freelance work would only last for just one year, from 6 April
2022 to 5 April 2023.

Requirement (a) – 3 marks

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On the assumption that Kazuo uses alternative 1, calculate the corporation tax
liability of Zaoku Ltd for the year ended 5 April 2023, and the income tax
payable by Kazuo in respect of his dividend income.

This requirement was generally fairly well answered, and there were many perfect
answers. Although candidates had the option of using a full calculation approach,
working at the margin was easier and quicker. There was also less scope for making
arithmetical errors.

Unless opting for a full computation approach, the only relevance of Kazuo’s salary of
£200,000 was to establish the rate of tax applicable (and it was stated that Kazuo was
an additional rate taxpayer in any case). However, a number of candidates included
this amount within their corporation tax computation, and this then had a knock-on
effect throughout the remainder of the answer.

If using a working at the margin approach for the income tax calculation, this was
simply (for two marks):

40,000 (freelance earnings) - 7,600 (corporation tax as calculated) - 2,000 (dividend

nil rate band) multiplied by the dividend additional tax rate of 39.35%

Common problems included using the gross earnings (rather than the net of tax figure)
and using an incorrect rate of tax. Given the rates of tax are provided, it made no
sense to lose a half-mark by carelessly using, for example, 39.55% instead of 39.35%.

Requirement (b) – 4 marks

On the assumption that Kazuo uses alternative 2, explain the corporation tax,
income tax and NICs implications, and calculate the tax saving compared with
alternative 1.

This requirement caused the most problems, although it was more straightforward
than many candidates appreciated.

Examiner’s report – TX-UK March/June 2023 12

Corporation tax: Paying the director’s remuneration and making the pension
contribution simply reduced Zaoku Ltd’s taxable total profits (and corporation tax
liability) to £0 (40,000 - 8,000 - 32,000). Most candidates picked up the deduction for
the director’s remuneration, but the deduction for the pension contribution was
generally overlooked.

Income tax: With a working at the margin approach, the income tax liability was simply
8,000 at 45% = £3,600. The company pension contribution was an exempt benefit,
and, since it was paid by Zaoku Ltd, did not extend Kazuo’s tax bands as was often
stated by candidates.

NICs: With gross directors' remuneration of just £8,000, there were no class 1 NICs
given earnings were less than the lower threshold. Many candidates included the
completely separate salary of £200,000, and therefore calculated class 1 NICs at the
rate of 3.25%. This is why it is so important to read through the question carefully.

Comparison: When it came to the comparison with alternative 1, many candidates

compared the income tax and NICs, but forgot to include the corporation tax figures.
This should have been an easy one mark, as the mark was given provided a candidate
made the comparison using whatever figures they had calculated. Another common
mistake was to make a comparison based on a full computation approach with one
done using a working at the margin approach. It should have been apparent that such
a tax difference was not realistic.

Many candidates wasted time by redoing their part (a) figures instead of just picking
then up from part (a).

Requirement (c) – 3 marks

On the assumption that Kazuo uses alternative 3, calculate the tax saving
compared with alternative 1.

There were a number of very good answers for this requirement. However, as already
mentioned, many candidates did not appreciate that part (c) was essentially the same

Examiner’s report – TX-UK March/June 2023 13

as part (a), but set a few years ahead with the dividend higher tax rate being applicable
(rather than the additional rate).

Full marks could have been obtained with the following working:

30,400 (40,000 - 7,600 - 2,000) at 5.60 % (39.35% - 33.75%) = £1,702.

One fairly common mistake was to either ignore the corporation tax (which was
unchanged) or to calculate a new (and different) corporation tax figure.

The important thing when confronted by a different style of question to what has been
practiced (and this will often be the case with the higher skills questions) is to not panic,
read the question carefully to see what is required, and to appreciate that if workings
become too long or complicated, the requirement has not been properly understood.

Hannah

The income tax question was based around Hannah, who ceased self-employment on
31 July 2022 and commenced employment with Lomly Ltd on 1 January 2023.

Requirement (a) – 6 marks

Calculate the trading income assessment of Hannah for the tax year 2022-23.

This involved taking account of the trading profits for the year ended 30 April 2022
and the period ended 31 July 2022, the balancing charge arising on cessation, as
well as utilising unused overlap profits.

This was the least well answered requirement, with the trading profit for the year ended
30 April 2022 missed by many candidates.

Invariably, a number of candidates did not appreciate that for the year of cessation, no
capital allowances (including the annual investment allowance) are given – just
balancing adjustments. Candidates only had to calculate Hannah’s capital allowances
for the period ended 31 July 2022, and the aspect which caused most problems was

Examiner’s report – TX-UK March/June 2023 14

the purchase of office equipment on 15 May 2022. This simply had to be added into
the main pool, but too often the annual investment allowance was calculated instead.

The correct end result was a balancing allowance of £500 for the main pool and a
balancing charge of £920 for the car. Netted off, this gave an overall balancing charge
of £420. This had to be added when calculating the trading income assessment,
although it was often deducted.

Requirement (b) – 8 marks

Calculate the employment income of Hannah for the tax year 2022-23.

This requirement was generally very well answered, and there were a number of
perfect answers.

Along with Hannah’s salary for three months, candidates had to take into account:

• Hannah being provided with living accommodation (candidates had to use the
purchase price of the property as it was purchased less than six years before
being first provided to Hannah);

• Hannah having an interest-free loan (the average method was applicable, and
candidates had to take account of monthly loan repayments made by Hannah);

• Hannah receiving a mileage for using her private car (the rate reimbursed by
Lomly Ltd was 50 pence per mile despite the approved milage allowance being
45 pence per mile); and

• A reimbursement for business expenditure incurred personally by Hannah (an

exempt benefit).

There were no consistent mistakes made with this requirement, although candidates
sometimes forgot to restrict the living accommodation and beneficial loan benefits by

Examiner’s report – TX-UK March/June 2023 15

3/12ths. The business expenditure reimbursement was sometimes treated as a taxable
benefit.

When answering this style of requirement, candidates need to keep workings as clear
as possible, and then pull everything together into an overall summary computation. It
is best to avoid putting workings for two or three marks within the one cell. It is very
easy to make mistakes, and marks can easily be lost if workings are not clearly shown.

Requirement (c) – 1 mark

Explain how the tax treatment of the property provided to Hannah would differ
if it qualified as job-related accommodation.

If the property had qualified as job-related accommodation, there would have been no
taxable benefit for Hannah. The majority of candidates appreciated this, although
some candidates instead explained how the 10% restriction for living accommodation
expenses would be applied.

Examiner’s report – TX-UK March/June 2023 16

Venus Ltd

The corporation tax question was generally very well answered, with many candidates
scoring high marks.

Requirement (a) – 15 marks

Calculate Venus Ltd's corporation tax liability for the year ended 31 March 2023.

Commencing with the operating profit, candidates were required to adjust for the
following:

Disallowable expenditure (2.5 marks): There were five items to consider, and these
were all non-allowable. The majority of candidates correctly adjusted for four or five of
the items, although the amortisation and/or the qualifying charitable donations were
sometimes missed. For this style of question, it is very important that candidates
clearly indicate whether items are being added or deducted. A single column layout is
therefore recommended.

Leasehold premium (3 marks): Many candidates had no difficulty calculating the

correct deduction for the grant of a 12-year lease. One common mistake, however,
was to work out the non-chargeable portion of the lease (96,000 x 2% x (12 - 1) =
£21,120) and then use that for the basis of the lease deduction rather than working
out the chargeable portion (96,000 - 21,120 = £74,880). Although most candidates
appreciated that the chargeable portion then had to be divided by the number of years
of the lease (12 years), quite a few did not then apply the 6/12ths restriction; the lease
being granted on 1 October 2022.

An alternative approach to calculating the chargeable portion of the lease was 96,000
x (51 - 12)/50 = £74,880. If using this approach, candidates needed to take care as
the incorrect number of years (51 years and 12 years) were often used.

It was also important to realise that the final result had to be deducted in the main
computation.

Examiner’s report – TX-UK March/June 2023 17

Regardless of approach, it is not recommended to attempt the entire working within
the one spreadsheet cell. For example, missing the brackets on 96,000 x 51 - 12/50
would give an answer of £4,896,000. Provided the correct workings are shown,
appropriate marks will be awarded even if a candidate makes an arithmetical error.
Without workings, it can be difficult determining what the candidate’s intention is.

Capital allowances (5.5 marks): There were quite a lot of marks for a capital
allowances computation, so care was needed. It was pleasing to see many perfect
answers, but some candidates struggled here. It was necessary to decide whether an
asset purchase qualified for the super-deduction or 100% annual investment
allowance, and, if qualifying for neither, whether the purchase went into the main pool
or the special rate pool. In fact, there were four additions, with all four options being
covered; one for each case.

The aspect which caused most difficulty was the disposal of the car purchased during
the same year. The correct treatment was to add the addition and to deduct the
disposal proceeds from the special rate pool. However, many candidates kept this car
separate and calculated a balancing adjustment.

Other income (2 marks): The other income consisted of bank interest (it was
necessary to add in a year end accrual), dividends from an 80% UK subsidiary
company (this was exempt income) and a chargeable gain (the profit before taking
account of the indexation allowance was also given).

Once again, there were a lot of perfect answers here. Typical mistakes included
deducting the bank interest accrual, treating the dividend as taxable, and using the
pre-indexed gain or deducting the annual exempt amount of £12,300. This is why
question practice is so important because these are the type of mistakes which if made
once, are less likely to be repeated.

Deductions (1.5 marks): After adding it back to trading profits earlier, the qualifying
charitable donation now had to be deducted from total profits for a half mark. A group
relief deduction was also available in respect of a trading loss made by the 80% UK
subsidiary company. There was one mark for this, but only a half mark if not deducted
at the correct point in the main computation or if the loss was restricted to 80%.

Corporation tax (0.5 mark): The final half mark was for calculating the corporation
tax liability. This generally wasn’t a problem, although a few candidates kept the
chargeable gain separate and then applied a different rate of tax on this.

As already mentioned, with computations containing both additions and deductions,

candidates should be very careful to indicate which is which. A single column approach
with deductions included as such on the spreadsheet avoids any confusion. It is then
just a matter of using the SUM function to get to a figure for taxable total profits. The
simplicity of this approach is that the same layout can be used regardless of whether
a profit or a loss is involved.

The only aspects of the answer which warranted separate workings were the
leasehold premium and the capital allowances. Everything else was easily dealt with
within the main computation.

Examiner’s report – TX-UK March/June 2023 18

Layout is not something candidates should really be concerned about on the day. With
sufficient question practice, the correct layout becomes automatic.

Examiner’s report – TX-UK March/June 2023 19