ACCA F6 Exam Tips December 2016 Session given below are just intelligent guesses from exam point of view provided by famous tuition providers. These exam tips must not be relied on totally. To increase chances of success in Exams you must prepare full breadth of syllabus and topics
ACCA F6 Exam Tips December 2016:
ACCA F6 Exam Tips December 2016 Session are given below by famous tuition providers
Make sure you read the tax rates and allowances in the exam. You may find they prompt you to remember things. For example, as high emission cars only receive a 8% WDA for capital allowances it may remind you that high emission leased cars with CO2 of > 130g/km have a restriction in taxed adjusted profit computations of 15%.
The badge of trade to determine if someone is self employed can be remembered using the mnemonic SOFIRM and FAST:
- Subject matter of the transaction
- Ownership period
- Frequency of the transactions
- Improvements and marketing
- Reasons for sale
- Motive (profit)
- Acquisition (method of)
- Similar transactions
In section A there will be a wide range of topics tested as the examiner has to set 15 OTs. We would expect at least a couple of these OTs to be devoted to the administration of income tax and corporation tax. So candidates should ensure they are comfortable with the following:
- Due dates for the payment of income tax (including payments on account)
- Due dates for the payment of corporation tax (including instalments for large companies)
- Filing dates for the income tax and corporation tax returns
- Penalties and interest for late payments and returns
Also likely for the OT section of the exam are the following:
- VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat-rate schemes
- Inheritance tax due on lifetime transfers both in the donor’s life and on death
- Statutory residence tests for individuals
- Identification of groups of companies for corporation tax loss reliefs and gains
- Trading loss reliefs for both companies and sole traders
It is important to remember that section A offers the F6 examining team an opportunity to test THE WHOLE SYLLABUS so practising on ALL KINDS OF F6 questions from the practice and revision kit will help build and complement your existing knowledge.
In section B of the exam the questions will be similar to those of section A but there will be a longer scenario to deal with than in section A questions. This means a slightly different exam skill is necessary as you have more information to deal with and each OT will require you to find the relevant information or data in that scenario. It is not a difficult skill but we would hope you have had time to practice an extensive range of section B questions from the practice and revision kit before attempting the real exam.
In section C you will face the longer, constructed response questions with scenarios and much more open requirements. Your answers will need, not just sound technical knowledge, but also that knowledge will need to be relevant to the question you have been asked. Furthermore your answer will have to be presented logically so the marker can follow your thought processes.
At least 50% of your revision time has to be spent answering the section C questions in the practice and revision kit to build up confidence and speed in a way that will also maximise marks.
1. Remember to learn your income tax and corporation tax proformas.
2. Calculations which require no more than two or three entries into your calculator can be included on the face of your proformas (eg. Grossing up dividends/interest). Calculations which are more complex (eg. Company car benefits) need separate workings which are properly referenced (W1, W2 etc and with a heading).
3. Actually attempt the narrative parts of the requirement – aim for as many sentences as there are marks with each sentence containing something technical. Keep your paragraphs to no more than 3 sentences long (4 at an absolute maximum).
4. In both numerical and narrative answers leave plenty of space on the page. So in proformas – leave a gap between each line (you will definitely need to add something in). In narrative answers leave a line or two between each paragraph just in case you remember something later. Well spaced answers are also easier to mark – and you ALWAYS WANT TO KEEP YOUR MARKER HAPPY.
We know that the two longest questions will focus on income tax and corporation tax. This is likely to include the following.
- Employment benefits
- Property income
- Relief for pension contributions
- Adjustments to profit to arrive at trading income for both companies and sole traders – in past sitting we have seen a number of questions whereby you have to correct errors in computations included in the scenario
- Capital allowance computations
- It is also likely that section C will include a ten mark question on VAT, inheritance tax or capital gains tax. So remember to cover the whole syllabus in the practice and revision kit.
Finally, remember the pass mark is 50% you don’t need to be perfect. If you don’t know something have a guess and move on. Sometimes you have to do that in order to get follow through marks in section C questions. If you make a mistake but then have to use that incorrect figure later on in a subsequent calculation then that’s fine you can only lose the mark once. In section A and B never leave an OT unanswered, have a guess if need be.
Section A will contain 15 MCQ each carrying 2 marks. Students may favour this style of questioning as the answer is after all given in the question but remember there are no marks for coming second!
In Section B on a 2 mark section if you make a small error you may score 1.5 marks – in Section A you score nothing! Remember that the other options are not random numbers but answers that a student could indeed deduce but having made an anticipated error.
You must be very careful therefore to read the exact requirement, for example does the question ask you to compute Income Tax Liability or Payable or even Taxable Income? Does it ask for Class 1 NIC payable by the employer or all Class 1 NIC payable (employer and employee) or all NIC payable by the employer (Class 1 and Class 1A NIC of the employer? Does the examiner ask for the allowable expenses of the trader to be computed or the disallowable? Read the requirements very carefully!
Pick out the easier MCQ to do first. If there are a few MCQ that you find very difficult leave these to the end of the exam, make certain you do not waste time on these at the expense of Section B questions where marks can more easily be secured for anything you do right! In the last minute of the exam if there are any questions unanswered it should only be a very few MCQ where you are uncertain of the answers and as a last resort you go with your favourite letter, you don’t lose anything for getting it wrong!
MCQ will also allow the examining team to more widely test the syllabus bringing in issues not tested in the written questions in Section B and are likely as per the specimen paper to cover all the taxes.
In Section B we know that we will see a 15 mark Income Tax question which is likely to require an Income tax Computation to be prepared including a combination of employment income with assessable benefits, property income, interest and dividend income. It may also include the opening or closing years of an unincorporated trader as the individual moves from employment to self employment during the tax year or vice versa.
There will also be a 15 mark Corporation Tax (CT) Computation which is where traditionally we have found the adjustment of profit and capital allowances work to be done. The latest style of testing this is to give you in the question not the statement of profit or loss and ask you to prepare the CT computation but gives you within the question an error strewn CT computation prepared by the client and ask you to correct it!
It may be the case that you have to prepare 2 CT computations as you have to deal with a long period of account.
The remaining four 10 mark questions will almost certainly be on CGT, IHT and VAT with a final question testing a different area of either Income Tax or Corporation Tax, for example losses of either a company or unincorporated trade, partnerships, pension contributions, groups of companies or the administration of the taxes and ethics.
If a question involves corporate gains rather than an individual then the main assets that a company may dispose of would include:
Properties – this may involve establishing the cost of the property from an earlier acquisition via a no gain no loss transfer from a fellow gains group
member and/or the cost may have been reduced by a rollover relief claim at the time of acquisition. The gain arising may now also be deferred by a full rollover or partial rollover relief claim or if a depreciating asset is now acquired a holdover relief claim may instead be available.
Shares from a share pool
Chattels – e.g. a painting from the boardroom (times are hard!)
If a share disposal by an individual takes place then this could be in the form of a takeover, or the sale of shares that had been acquired as a result of an
If dealing with disposals by an individual reliefs are always tested, note gift relief and PPR relief
Computing the IHT arising on death dealing with the calculation of the transfer of value for a lifetime transfer, possibly unquoted shares and utilising the transfer of unused nil rate band from spouse
Preparation of a VAT return possibly dealing with deregistration on the cessation of a trade. Overseas aspects of VAT & Group VAT registration
The detailed technical article on Motor Cars may form the basis of the more challenging style of question now favoured by the examining team where the candidate is required to think very carefully to answer a more unusual stated requirement.
This may involve for example evaluating the tax position of both the business (unincorporated or incorporated), and if separate, the individual, regarding the provision of a car and fuel to an employee or proprietor. This may involve elements of Income Tax, Corporation Tax, VAT and NIC’s. Work carefully through the exam standard example at the end of the examiner’s article.