Assignment Brief

Qualification

Unit number and title

Pearson BTEC Level 5 HND Diploma

Business

Unit 12: Taxation

Assessor name: Dr Ria

Final Submission Date:

Issue Date:

16th Nov 2015

29th Jan 2015

Assignment title

Taxation of Individuals and Limited companies in the United Kingdom

(3000 words)

Learner Declaration:
I certify that the work submitted for this assignment is my own and research sources are fully
acknowledged.

Student Signature:

Learning

Learning

Date:

Assessment

In

this

Task No

Evidenc

Outcome No

Outcome

Criteria

assessment you

e Pg No.

will have the

opportunity to
present
evidence

that

shows you are

L01

Understand the 1.1

able to
Describe

the 1

duties

UK

tax

and

responsibilities
of

the

practitioner
the

UK

environment

tax
in 1.2
tax

environment

Analyse

the 1

role

and

responsibilities
of

the

tax

practitioner
1.3

Explain the tax 1

obligations

of

tax payers or
their agents and
the implications
of
L02

Be

able

to 2.1

calculate

non-

compliance
Calculate

relevant

personal

tax

income,

liabilities

for

expenses

individuals and

and

allowances

partnerships
2.2

Calculate

taxable
amounts

and

tax payable for

employed

and

self-employed
individuals and
payment dates
2.3

Complete

relevant
documentation
and tax returns

L03

Be

able

to 3.1

Calculate

calculate

chargeable

corporation tax

profits

liabilities

for

companies

3.2

Calculate

tax 3

liabilities

and

due

payment

dates
3.3

Explain

how 3

income

tax

deductions are
L04

Be

able

to 4.1

dealt with
Identify

calculate capital

chargeable

gains

tax

assets

payable

for 4.2

Calculate

individuals and

capital

business

and losses
4.3

4
gains

Calculate
capital

4
gains

tax payable

Purpose of this assignment

This unit aims to give learners and understanding of the taxation of individuals and limited companies in the
United Kingdom.
Task 1: Duties and Responsibilities of the Tax Practitioner in the UK Tax Environment
(LO1: 1.1,1.2,1.3 and Grades: M1, M2, D2)
You have recently graduated and been offered a job as a Trainee Accountant in a medium sized accounting
firm. The firm has high value clients including individuals and corporate organisations who hire the services
of your firm for tax and account purposes.
It is very important to have a good knowledge of the UK Tax law, particularly tax rates and key dates in
order to work effectively for the clients. Therefore, you are expected to have a basic knowledge about the
UK Tax system and its implications.
Your Line Manager has given you a task to present a report based on the following:
1.1 Describe the UK Tax environment
1.2 Analyse the role and responsibilities of the UK Tax Practitioners
1.3 Also explain the tax obligations of tax payers or their agents and the implications of noncompliance
In order to achieve M1, all pass criteria would have been achieved and M1 as stipulated like discussion
with example about UK tax system, tax rates for all entities, roles & responsibilities of tax payer as well as
tax practitioner and implication on non-compliance.
In order to achieve M2, all M1 would have been achieved with evidence of using and appropriate tax rate,
computation and correct result in context of the scenario.
To achieve D2 you will have demonstrated an effective approach to independent research and study, like UK
tax system, organisations tax obligation, etc. and will have met the deadline to submit the tasks and achieve
the unit assessment criteria.

Task 2: Personal Tax Liabilities for Individuals and Partnerships

(LO2: 2.1,2.2,2.3 and Grades: M3, D1, D3
Scenario 1 (for Employed)
Ms. Bailey joined as a full-time in an IT Consultancy firm on 05 th May 2014. Her contacted hours are 37.5
with agreed pay rate of 25 per hour.
Scenario 2 (for Self-Employed)
Mr. Thomas is running 2 retails shops and working as a self-employed. His financial activities for ship 1
and 2 during the year ended 05th April 2014 are as follows:
SHOP 1
Sales
Cost of Sale
Wages
Rent & Rates
Drawing
Administrative Costs
Travel Home to

697,092
523,150
52,000
31,210
9,600
15,865
1,450

Shop
Charitable Donation
Bank Charges
Depreciation
Capital Allowance

157
435
2,00
1,800

SHOP 2
Tax Losses

874

You are required to do the following by provided information in the above scenarios:
2.1 a) Calculate the relevant income and allowance for individual

b) Calculate the relevant income, expenses and allowance for self-employed

2.2 Calculate the taxable income and tax payable (for both employed and self-employed) and provide tax
payment due date for self-employed.
2.3 Complete the relevant documentation and tax return for the above employed and self-employed at the
end of the tax year (forms are available on Moodle)
To achieve M3, M1 and M2 must have been achieved and provide evidence of resulted figures, appropriate
tax rates and related tax documents acceptable in the UK tax environment and organisation, i.e. P60, P45,
tax return etc.
In order to achieve D1, M1, M2 and M3 must have been achieved and an appropriate conclusion with
explanation should be drawn based on the tax computation and rate according to provided scenario.
D3 will be awarded based upon overall format, tax rates, calculations, creativity and style of presentation.

Task 3: Corporation Tax Liabilities for Companies

(LO3: 3.1, 3.2, 3.3 and Grades: M1, M2, D2, D3)
The XYZ Limited Company is running a textile business in London. The financial date of the company for
the year 2013-14 are as under:
Financial Date XYZ Limited Company

Sales
480,000
Purchase
160,000
Direct Overheads
80,000
Indirect Overheads
60,000
Dividend Paid
36,000
Interest Paid
50,000
Dividend Received (10% Taxable)
4,500
Capital Allowance for the Year
43,200
Depreciation
48,000
Capital Gains
80,000

Capital Loss
Income from Letting out Building
Wear & Tear Allowance
Interest on Investment (10%

30,000
20,000
2,000
27,000

taxable)
The company is entitled (for the above period) to an audit and exemption under section 477 of the
Companies Act 2006. Also financial statements are being prepared in accordance with the special provisions
of Part 15 of the Companies Act 2006 relating to small companies and in accordance with the Financial
Reporting Standard for small entities (effective 2008).
You are required to do the following:
3.1 Calculate the chargeable profit for the company.
3.2 Calculate the tax liability of the company and when it would be due
3.3 Explain how income tax deductions are dealt with.
In order to achieve M1, all pass criteria would have been achieved and M1 as stipulated like discussion
with example about UK tax system, tax rates for all entities, roles & responsibilities of tax payer as well as
tax practitioner and implication on non-compliance.
In order to achieve M2, all M1 would have been achieved with evidence of using and appropriate tax rate,
computation and correct result in context of the scenario.
To achieve D2 you will have demonstrated an effective approach to independent research and study, like UK
tax system, organisations tax obligation, etc. and will have met the deadline to submit the tasks and achieve
the unit assessment criteria.
D3 will be awarded based upon overall format, tax rates, calculations, creativity and style of presentation.

Task 4: Capital Gains Tax for Individuals and Businesses

(LO4: 4.1, 4.2, 3.2 and Grades: M1, M2, D2, D3)

Scenario 1
Mr. John Potter is working as a self-employed and his extracted financial information for the year 2013-14
are as under. He is using straight line depreciation method at the rate of 20% for his non-current assets.
Extracted Financial Information Mr. John Potter
Trading Profits
Accounts Receivables
Inventory
Textile Machinery bought as pm 16th August, 2013
Equipment bought at discounted price on 1st May, 2013
Sale of above equipment on dated 31st March, 2014
Capital gains tax exemption

57,100
29,400
14,200
60,000
36,000
42,000
10,900

4.1 Identify the chargeable assets for capital gains tax

4.2 Calculate the amount of capital gains/losses and the amount of taxable gains/losses that should be
adjusted with his trading profit.
Scenario 2
CMS Trust has the following transactions in its Non-current assets account at the year end.
Non-current assets CMS Trust
Tangible Assets (opening balance)
Tangible Assets (closing balance)
Sales proceed received

116,000
---43,000

Trust bought the above asset 5 years before at a cost of 580,000 and used straight line depreciation method.
The capital gain tax exemption for the trust is 5,450 for the year 2013-14. You are required to:
4.3 Calculate the amount of capital gains/losses and how much amount to pay as a capital gain tax liability.
In order to achieve M1, all pass criteria would have been achieved and M1 as stipulated like discussion
with example about UK tax system, tax rates for all entities, roles & responsibilities of tax payer as well as
tax practitioner and implication on non-compliance.

In order to achieve M2, all M1 would have been achieved with evidence of using and appropriate tax rate,
computation and correct result in context of the scenario.
To achieve D2 you will have demonstrated an effective approach to independent research and study, like UK
tax system, organisations tax obligation, etc. and will have met the deadline to submit the tasks and achieve
the unit assessment criteria.
D3 will be awarded based upon overall format, tax rates, calculations, creativity and style of presentation.

In addition to the above PASS criteria, this assignment gives you the opportunity to submit evidence in or
Distinction Grades
Grade Descriptor

Indicative Characteristics

Contextualisatio

M1 Identify and apply strategies to find

An effective approach to assignment planning, In order to achie

appropriate solutions

achieved and M1
study and research is in evidence
Evaluations and judgements, using evidence , about UK tax s
have been made
responsibilities o
Problems with a number of variables have been
implication on no
considered

(Task 1, 3 and 4)

apply

appropriate methods / techniques

M2

Select

design

and

A range of relevant theories have been included

In order to achie
Relevant theories and techniques have been
with evidence
applied to the case study
A range of different sources of information have computation and

been used
The selection of methods / techniques of (Task 1, 3 and 4)
analysis and use of source material have been

justified
Information / date has been synthesised and
processed

M3

Present

and

communicate

appropriate findings

The written assessment is coherent, shows

logical development and a sound understanding

To achieve M3,

provide evidenc

of theories, concepts and research evidence

and related tax
The written assessment demonstrates that an
environment and
appropriate structure and approach has been
used
The written assignment demonstrates a writing (Task 2)
style appropriate for audiences both familiar and

unfamiliar with the subject

The written work is clearly written and technical
language has been accurately used

In addition to the above PASS criteria, this assignment gives you the opportunity to submit evidence in or
Distinction Grades
Grade Descriptor

Indicative Characteristics

D1 Use critical reflection to evaluate

own work and justify valid conclusions

Contextualisatio

Conclusions have been arrived at through In order to achie

synthesis of ideas and evaluation of research achieved and an

evidence have been justified

should be draw
The validity of results has been evaluated using
according to prov
defined criteria
Realist informed recommendations have been
proposed against defined characteristics for (Task 2)
success

D2 Take responsibility for managing

and organising activities

The

written

assignment

shows

excellent To achieve D2
planning, is organised coherently and is clearly approach to ind

expressed
system, organisa
Independence of though and gathering of
the deadline to
research material has been demonstrated

Material used has been clearly understood and assessment criter

well organised
The importance of individual and group (Task 1, 3 and 4)
behaviour in organisations and its management
has been recognised and addressed

D3 Demonstrate convergent / lateral /

creative thinking

There is evidence of self-generated ideas with

This will be aw

evaluation
Convergent and lateral thinking are evident in

calculations, cre

the written assignment

Creative thinking is evidenced with unfamiliar (Task 2, 3 and 4)

material
Problem-solving is in evidence Innovation and

creative thought are in evidence

Receptiveness to new ideas is evident
Ideas have been generated, evaluated and
informed decisions / recommendations are
made.