Level 4 Diploma in Personal and Business Tax

Introduction

This qualification is primarily designed for those taking responsibility for tax computations of individuals and businesses. It is also designed for those providing advice to small businesses such as Accountants, Book-keepers and Business Advisors. In the first unit the candidate will need to demonstrate an understanding of income tax and capital gains of employed individuals. In the second unit they will be expected to calculate Corporation Tax computations for UK companies which will include the treatment of capital gains. They will also be expected to calculate income tax computations for sole traders.

The Structure Of The Qualification

The Level 4 qualification is comprised of two Units - Personal Tax and Business Tax. To ensure that the qualification will effectively assess the understanding of candidates, each unit is sub¬divided into Learning Outcomes with associated Assessment Criteria. There are 5 learning outcomes, which relate to preparing Personal Tax computations and 6 learning outcomes, which relate to preparing Business Tax computations.

In relation to Personal Taxation the first learning outcome is concerned with the system of income tax and how it is controlled by the Revenue and Customs. The second learning outcome concentrates on the taxation of employment with specific emphasis on ‘Benefits in kind'. The third learning outcome examines the treatment of income from property and investments in readiness for the fourth learning outcome, which is concerned with the preparation of income tax computations. The final learning outcome concentrates on the preparation of capital gains tax computations for individuals.

The first Business Taxation learning outcome is concerned with an overview of Corporation Tax and its relationship with income tax and capital gains tax. The second learning outcome is concerned with the adjustment of net profit for tax purposes, followed by an appreciation of the workings of capital allowances in learning outcome three. The fourth learning outcome prepares capital gains tax computations for companies, which is followed by the calculation of tax payable through Corporation Tax computations in learning outcome five. The final learning outcome is concerned with the basis of business taxation for individuals and partnerships.

Assessment

There will be one externally set and marked three hour examination for each of the two units. The practical tasks will build on the candidate's knowledge of personal and business taxation. The unit 1 examination will relate to the five learning outcomes of personal tax and the unit 2 examination will relate to the six learning outcomes of business tax. Each examination will consist of four compulsory questions each linked to one more of the Learning Outcomes. Candidates will be required to carry out all tasks accurately and in keeping with recognised procedures and methods of calculating amounts of taxation. Faults will be incurred where candidates make errors in calculations.

Certification

All candidates who both enter for and attempt the examination will be notified of their results in a formal Results Letter issued by the IAB approximately ten weeks after the date of the examination. Those candidates who are successful and awarded a pass grade in each of the examinations may also apply for the IAB Level 4 Diploma in Personal and Business Tax. This will be subject to the payment of an additional fee as determined and published by the IAB

Course Contents

Unit 1 Preparing Personal taxation computations

Upon the completion of study for this unit it is intended that the candidate will be able to:

• Provide an overview of the system of income tax and the work of the Revenue and Customs
• Appreciate the taxation of employment including ‘Benefits in kind' and tax codes
• Prepare schedules of property income and investment income
• Prepare income tax computations and calculate income tax payable
• Prepare capital gains tax computations for individuals

Unit 2 Preparing Business taxation computations

Aim of the unit

Upon the completion of study for this unit it is intended that the candidate will be able to:

• Provide an overview of the system of Corporation Tax and the relationship with income tax and capital gains tax
• Adjust net profit for Corporation tax purposes
• Understand the purpose of capital allowances and be able to undertake calculations in relation to plant and machinery
• Prepare capital gains tax computations for companies
• Undertake Corporation Tax computations
• Appreciate the treatment of trading profits and other issues for income tax