Wondershare EdrawMind
MindMap Gallery ACCA-TX-Individual Tax
- 118
ACCA-TX-Individual Tax
The personal tax-related guide in the F6 tax law subject of the ACCA exam mainly includes the tax calculation process, related exemptions and adjustments, employee income, corporate taxable benefits, etc.
Edited at 2024-03-19 13:12:05
- bacteria
This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
- Plant asexual reproduction
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
- Reproductive development of animals
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
ACCA-TX-Individual Tax
- bacteria
This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
- Plant asexual reproduction
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
- Reproductive development of animals
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
- Recommended to you
- Outline
personal tax
UK resident
Three steps to determine resident
Non-UK residents also need to pay UK income tax
Step 1: Automatically conduct overseas testing to meet the requirement of no tax payment
Lived in the UK for less than 16 days
Have lived in the UK for less than 46 days and have not been a resident in the past three years
Have a full-time job overseas and be in the UK for ≤90 days in the year
Step 2: Automatic UK test to satisfy tax payment
Lived in the UK for ≥183 days in the current year
There is no house overseas, but there is one in the UK
Full time job in UK
Step Three: Adequacy Test
It is judged based on the length of residence corresponding to whether it was a resident before and the ties it meets.
5 ties: 1/Have a spouse or minor children but no parents; 2/Have a residence (not necessarily your own house) and stay for 1 night; 3/More than 90 days in any one year of the past two years; 4/The time spent in the UK in the current year Longer in other countries; 5/working 40 days in the year and 3 hours a day;
tax calculation process
income
NSI
trading income/employment income/property business income/pension
SI
Bank deposits and builders' association interest are actually received, while treasury bond gilts are accrued.
All taxes must be paid, and interest on national debt is calculated in the natural year.
Tax-free: 1. National Savings and Investment Bank interest on NS&I's saving certificate; 2. ISA-individual saving accounts - interest on savings is tax-free; dividends on stock purchases are tax-free, and stock sales are tax-free on capital gains tax, but only for the first 20,000 per year; 3. Other tax exemptions: dismissal compensation, gambling income, scholarships, lottery (premium bond prize, compensation interest, government subsidies;
An investment loan interest can be deducted from the gross income and deducted in NSI/SI/DI in order. If it is not used up, it cannot be carried forward to next year.
Net income is adjusted to ANI (adjusted net income). If ANI is less than 10w, you will get 12570 PA. If ANI exceeds two PAs, you will lose one PA. When ANI ≥ 125140, PA = 0.
Convert taxable income into tax liability---bucket rule: 0/37700/150000, corresponding to basic rate taxpayer/higher rate taxpayer/additional rate taxpayer. SI has a tax threshold of 5,000. SI water less than 5,000 is tax-free. Note that only the part of SI between 0 and 5,000 is tax-free, and this part will be squeezed out by NSI! To determine the high, low or middle income, PA must be subtracted! Additional tax-free amount: 1. SI part: If you are on the basic rate, you will get an additional 1,000 yuan tax-free on the SI part, and if you are on the higher rate, you will get an additional 500 yuan tax-free; 2. For the DI part, everyone will receive 2,000;
NSI: Less than 37700 is 20%-40%-45% SI: Less than 5000 is 0, 5000 to 37700 is -20%-40%-45% DI: Less than 37700 is 8.75%-33.75%-39.35%
Tax liability is subtracted from PAYE that has been withheld at source to calculate tax payable
Relevant reductions and adjustments
gift aid donation
Donations made under the payroll deduction scheme can be deducted from employee income
1. Tax relief at source, pay net amt, get gross amt; pay 0.8 yourself 2. Gross AMT can increase the scale of the bucket to bring about changes for high, middle and low-income people; 3. Adjust ANI as the subtrahend of ANI;
spouse special arrangement-tax planning
0 nil rate band means that the SI/DI deduction quota is not used up and can be transferred to each other.
When both husband and wife are basic rate taxpayers, PA can transfer 1260￡, but it needs to be reflected in tax liability (1260*20%=252)
If a couple jointly owns property, they will be taxed at half the rate per person, unless there is a clear ratio declared; Couples can declare joint accounts to equalize their incomes and make reasonable use of the low-income spouse to avoid taxes.
child benefit income tax
The condition for childcare subsidy is that the ANI does not exceed 50,000. If it exceeds 100 yuan, 1% of the childcare subsidy will be refunded. If it exceeds 60,000 yuan, all the childcare subsidy will be refunded. If either spouse exceeds 50,000 yuan, no matter who receives the childcare subsidy, it will be calculated as the earner;
employee income
If the company’s mileage allowance is small, the country’s 45/25p can be used to offset the employee’s income.
task4/ Corporate taxable benefits
vourcher
If there is an amount on the monetary-vourcher card, the cost will be calculated based on the amount; Non monetary Vourcher Calculate the taxable amount based on the costs incurred by the business; Calculation of amount wiped out by company credit card
Private use of company assets (non-car/van): Whichever is higher:
Donation situation: Whichever is higher: MV at the time of gift - consideration paid by employees, or original cost - benefit already assessed (the taxable amount used by all previous employees) - consideration paid by employees
car and fuel
car
taxable car benefit=x%*(list price - capital contribution)*time%-the consideration paid by employees, capital contribution is the part paid by employees when the boss buys the car, not exceeding 5,000
This x% is divided into electric vehicles (2%), gasoline vehicles (15% for displacements exceeding 51-54, 16% for exceeding 55g, and 1% for each additional 5g in the future, and 4% for diesel vehicles that do not meet RED, with a maximum of 37%
fuel
As long as the company pays it, it will be x%*25300*m/12
living accommodation
related to work
Housing tax exemption
Employer paid utilities/furniture
Whichever is smaller of 10% of net earnings and (employer’s expenses for utilities and 20% of furniture)
Nothing to do with work
housing
general charge
The higher of annual value and rent paid by employer, note n/12
additional charge - the purchase cost plus subsequent capitalization is greater than 75,000,
The time of purchasing the house and first using it by employees is less than 6 years, (purchase price capital expansion done before the tax year of move-in - 75,000)*2%*n/12
More than 6 years old, use the MV when the employee moved in instead of the purchase price
For capital expansion, please pay attention to whether it has been covered by MV.
Employer paid utilities/furniture
Employer spends 20% on utilities and furniture
The first $8,000 of moving expenses paid by the employer is tax-free
beneficial loan/cheaper loan
HMRC approved interest (2%) - the actual interest on the loan provided by the company, resulting in the taxable portion of the employee benefit (loans less than £10,000 are exempt) Note: There are two methods, normal/strict, for calculating HMRC’s interest. There is only one strict method for calculating the actual interest paid to the company! ! Choose the smaller of the two methods of HRMC in order to pay less tax
normal/average method --borrowing period (beginning and end of period)/2*n/12. Note that the balance at the beginning and end of the period should be the largest number at that time; alternative/strict method---calculated according to the period corresponding to the actual amount, which is the same as the loan interest calculation method provided by the company
PAYE
employer reports PAYE info to HMRC through Real Time Info system
P11D-emplyee taxable benefit, July 6 of the following tax year, to be shown to the tax bureau and employees;
P60 - employee income, tax code, and deduction information, given to employees on May 31 of the following tax year;
P45- For resigned employees, one share will be given to the old boss, one share will be given to yourself, and two shares will be given to the new boss;
The first late payment will not matter, the second one-month late payment will be fined: 9 people will be fined 100, 49 will be fined 200, 249 will be fined 300, 250 will be fined 300, and more than three months will be fined 5%.
task12/ National insurance contribution
class 1-employee(primary)
class1-employer(secondary)
5,000 can be reduced
They are all based on different proportions of employee earnings, which include: 1. Salary, bonus; 2. State-subsidized driving allowance for more than 10,000 kilometers reimbursed by the boss; 3. cash vourch; Note: Pay attention to whether the earning period is annual or monthly.
class1-A
15.05% based on corporate welfare in task4
Electronic payment is possible - July 22nd after tax year; Or pay by check - July 19th after the tax year;
Employee NIC
class2
3.15 pounds per week, no need to pay if income is less than 12570
class4
on trading profit after loss relife
The tax rate between 12571-50270 is 10.25%; Greater than 50270 tax rate 3.25%
The sole trader pays it to himself, but the enterprise does not pay it.
task11/ partnership
Mainly because it has one more step of profit distribution than sole trader, tasks 7, 8, then 11, then 9 and 10
Partners who join midway will calculate their taxable income according to the calculation logic of BP1-3.
task10/ trading loss
Cash basis losses can only be carried forward to offset trading profits.
Total income can be deducted in the current year and backward, and trading income can be deducted in the future.
The declaration must be made before January 31st of the next two years after the tax year. For example: the losses in 2022/23 shall be claimed on January 31st of 2025. carry forward needs to be at the end; The purpose of tax planning is not to waste PA
There is no limit on the deduction of trading losses;
Trading losses can be deducted from other income (including employment income, property, SI/DI other than trading income), not exceeding the higher of 5w or 25% of total income.
How to calculate deduction: 1. First add trading income and property to calculate total; 2. Whichever is higher between 25% of total and 5w; 3. In addition, trading can be fully offset;
Losses in the first four years can be deducted forward against three years of total income before PA
Closing losses (cash basis can only be used to offset future trading profits)
BP last-Calculate the loss of the last period normally, and you can offset the total income of one period forward.
terminal loss
LIFO deducts three years of trading income forward
Calculation of terminal loss: Losses in the 12 months preceding the date of discontinuation of operations! ! Use 4/5 as the dividing line to calculate the losses for the two periods respectively (if one of the periods is a positive number, take it as 0, and the excess tax paid in the first three periods will be added to the losses after 4/5); The period before 4/5 may span two accounting periods. Two accounting periods must be used to calculate the loss for the period before 4/5; the two periods are added together to get the terminal loss. The results may be different from the calculation method of BP last, unless 4/5 is used as the accounting day;
task9/ Adjust tax period
In which tax year the end of the accounting period of the continuing operation year falls, the profit of that year is the tax profit.
The start of business is divided into three stages: The first period: from the first day to the first April 5th; Second paragraph: If there is an accounting date in the second tax year, and it is less than 12 months from the start of business, the tax profit will be pushed back 12 months from the start of business; if it is greater than 12 months, the accounting date will be pushed forward. 12 months; if accounting date is not used, it is the accounting profit corresponding to the second tax year; Paragraph 3: The accounting end of the third tax year is pushed forward 12 months;
Circumstances of business suspension: Whether the last day crosses April 5th, if it doesn’t work, the last period’s tax profit must include the accounting profits of the first two periods, because the penultimate period’s accounting profits are due on April 5th and have not yet been paid, so when the operation is suspended Hand in together
task8/ capital allowance
Cash basis does not have capital allow
plant & machinary
Asset type
Main Pool
Mid-row car 1-50g/km
Special Rate Pool
Assets with high-emission vehicles and lifespan ≥25 years
Mid- and high-row cars are not eligible for AIA
PM integral to a building
Electrical system, cold water system, space/water heating system, ventilation, cooling, elevator...
SLA-short-life asset
Assets that are expected to be disposed within 8 years are calculated separately. WDA is used to calculate depreciation normally, and BA/BC clearing is used to calculate depreciation for disposal; If it is used for more than 8 years, it will be included in the MP calculation;
car
Mid-row cars with 1-50g/km in MP correspond to 18% depreciation; high-row cars in SRP correspond to 6% depreciation; both do not enjoy AIA and FYA
Depreciation type
WDA-writing down allowance, for assets still in use
SRP-6%, others 18%
AIA-annual investment allowance, for newly purchased assets (excluding cars)
AIA depreciation is online at 1 million, which will be used by SRP first.
Instead of looking at the accounting period and multiplying by n/12, AIA first multiplies 1 million by n/12 to calculate the maximum value! This is different from MP's method If AIA is not enough, the remaining value of the asset must be put back into MP/SRP to provide for impairment! ! !
FYA-first year allowance, for car
Zero displacement cost directly enters the expense
No need to think about it for months
For partial private use, the ending balance is calculated normally, but the depreciation amount must be multiplied by the public proportion.
assets sold
Separately listed assets, such as SLA and boss private use
Clear it through balance charge (profit) or balancing allowance (loss). Note that the disposal amount cannot exceed the original amount of the asset. If it exceeds the original amount of the asset, BA and BC can only be calculated using the original amount of the asset.
MP and SRP
If there is still a balance in the pool, tax depreciation will be calculated normally through WDA; If the pool is sold for a negative amount (a big profit is made), the taxable amount must be calculated through BC
closing year
WDA/AIA/FYA will no longer be used to calculate assets bought and sold in the closing year. All assets will be deemed to be disposed of as MV in that year, and the balance will be cleared using BA/BC.
If there is no AIA or FYA in the year of graduation, the WDA for the current period will not be calculated, and BC/BA will be calculated directly. Time apportion does not need to be considered, but the private use ratio needs to be calculated.
structure & building Must be for trade or letting purposes
Depreciation and amortization are over 33 years and 4 months, so SBA=3%*(COST-land cost)*n/12
If the capitalized amount is increased during repairs, the depreciation of the increased part must be calculated separately because the usage period is different from the original part.
task7/ trading income Characteristics of trading income: object, frequency, short time, profit motive, processing, intentional acquisition
Adjust from net profit of period of account to trading profit of period of account
When renting a car with an engine displacement exceeding 50g/km, 15% of the rental cost will be deducted
No need to consider the month of use
If the TWDV of the MP is less than 1000 (multiplied by n/12), directly use WDA to clear it, and do not calculate 18%.
fine & pennalty--there is no need to add back the employee if it happens.
Cash basis situation If your income is less than 150,000 yuan, you can quit. If it is more than 150,000 yuan and more than 300,000 yuan in the previous year, you must quit.
Buying and selling land and cars does not count, but machinery and equipment does.
motor exps uses mileage allowance to calculate the cost of the commercial part
Trading losses can be offset against unlimited future annual income
The owner-occupied commercial house is not tax deductible
The fee is reduced by 350 for one boss, 500 for two people, and 650 for three people.
task5/ Lease income property income: Individual leases exceeding 150,000 must use the accrual method
rent a room
Gross rental income≤7500, choose the lower one between 0 and the normally calculated income. If the profit is negative, it can be deducted
Gross rental income (including fees) is greater than 7500, choose the lower one between gross rental income-7500 and normal calculation
rent a house
add-on
There is a difference between rental--cash basis and accrual basis Deposit--The deposit defaults to 0 unless specified.
premium--premium
For the landlord: P*(51-N)/50 The fee for tenants is: P*(51-N)/50/N*M/12
A minus for tenants
Subtraction
Bad debts - there is a difference
Does not exist on cash basis;
Insurance – There’s a Difference
Under accrual, allocation is based on time, but personal income tax defaults to cash basis!!!
motor exps/mileage allowance
Lease-related driving expenses are deductible against lease income
You can directly deduct the expenses, or you can choose to declare a mileage allowance - 0.45p/km within 10,000km, and 0.25p/km over 10,000km.
Others that can be deducted: revenue-related decoration, repairs, agency, council tax paid by landlord
finance cost
House repairs and council tax can be deducted from rental income, but loan interest cannot.
residential
Deduct 20% of finance cost from income tax liability
Non-residential, such as offices and B&Bs
Deduct all financial costs directly from property income
Task18-4 content, enterprise leasing is subtracted from investment
replacement domestic items relife
For non-B&B furniture, the cost cannot be deducted when purchased. It must be deducted according to the current MV of the new asset with the same function when replacing it, but the residual value of the old furniture must be added back.
Homestay---deducted directly during the purchase period
Relevant expenses within the first 7 years of the lease
loss relife
B&B and general letting cannot be deducted from each other; Multiple rentals cannot have a negative number at the end, and the loss can be deducted next year]
current-forward-self-deduction-separate, unlike corporate income tax, corporate leasing losses can be deducted from current and future total profit
task 6/ pension
1. First calculate the pension amount that can enjoy tax benefits: 3,500 and income, whichever is greater, and then see if your investment (PPS OPS) exceeds; 2. Calculate AI again and compare with 24w to adjust AA (consider those brought over in the previous 3 years, they must be members); 3. Compare 1 and 2 to calculate how much pension should be included in NSI taxable (consider PPS adjustment rate band and adjustment ANI to determine PA);
Start receiving at the age of 55, and receive 25% in one lump sum - tax-free. The remaining 75% is normally included in the annual IIT. After the total amount received exceeds 1,073,100, the tax rate becomes 55%.
personal pension scheme (PPS)-paying personal pension is the same as gift aid donation
1. Tax relief at source, pay net amt, get gross amt; 2. Gross AMT can increase the scale of the bucket to bring about changes for high, middle and low-income people; 3. Adjust ANI as the subtrahend of ANI;
o'ccupational pension scheme(OPS)
What the boss pays can be deducted from trading benefit What the employee pays himself can be deducted from the employment income
There is an amount limit for pension benefits: 3600 or social value, whichever is higher, social value = employee income trade benefit B&B income
Tax-free limit—AA (annual allowance, 40,000)
40000 base, use AI (adjusted incom) to adjust it down. If AI exceeds 240,000, decrease AA by one block for every two blocks, with a minimum of 4,000. 1. The portion of a pension that enjoys tax incentives in excess of AA (AA charge) will be regarded as NSI's taxable income, and the tax rate will be after all NSI/SI/DI are depleted; 2. If the AA is not used up, you can carry it back 3 years. Use the current year first, then the oldest;
AI (adjusted income) = net income OPS (both yourself and the boss are counted) PPS (only the boss pays are counted)
12570 25300 75000 252 8.75/33.75/39.35 1073100--55% 40000--240000 12571--50270--10.25/3.25
Notice: taxable income/gain chargeable income/gain
Some tax-free: Canteen/uniforms provided to all staff... 8,000 moving fee; parking workplace, nursery; Non-cash small gifts not exceeding 50 yuan (except food and drinks); Old employee award, those with more than 20 years of service, have not received it in the past 10 years, and the average is less than 50 yuan per year; Loans less than 10,000; work-related accommodation; Expenses during travel are RMB 5 per day in the UK and RMB 10 per day overseas. Any excess expenses are fully taxable; For homeworking, 6 yuan per week is tax-free, and the excess is taxable; Bicycles and first mobile phones are exempt from tax; Staff party, 150 yuan per person/year; medical insurance - fully tax-free overseas, UK taxable amount is the employer's cost;