Unofficial practice for the ACCA Taxation (TX-UK) exam. Not affiliated with or endorsed by ACCA.
TX-UK is one of ACCA's Applied Skills exams. Every question is compulsory, the pass mark is 50%, and 40 of the 100 marks are in three longer questions where you build a computation and explain it.
| Length | 3 hours, computer based |
|---|---|
| Section A | 15 objective test questions of 2 marks, 30 marks |
| Section B | 3 case style questions, each with 5 objective test questions, 30 marks |
| Section C | One 10-mark and two 15-mark constructed response questions, 40 marks |
| Pass mark | 50% |
| Legislation | Finance Act 2025: tax year 2025-26, financial year 2025 |
Learn the layout of each computation until it is automatic, practise reading what a question asks before calculating, use the tax rates and allowances you will be given rather than memorising them, and sit timed papers so the pace is familiar before the exam.
Basis of assessment, losses and partnerships
Gita has run a business for many years. She made a trading loss in the tax year 2025-26 and expects to trade for many more years.
Which of the following is NOT a way in which Gita can relieve the loss? (2 marks)
Taxable total profits
Kelso Ltd's net profit for the year ended 31 March 2026 is £352,000, after deducting depreciation of £61,000 and a fine of £2,000 for filing VAT returns late, and after crediting rental income of £24,000 from a flat it lets.
On 1 October 2025 Kelso Ltd bought a new office building from its developer for £900,000, of which £300,000 related to the land, and brought it into use in its trade the same day. It also bought new machinery for £75,000. It claims the maximum allowances available.
What is Kelso Ltd's tax-adjusted trading profit for the year ended 31 March 2026? (2 marks)
Shares and reliefs
Each of the following disposals in the tax year 2025-26 was made by an individual at a gain.
Which of the following disposals is exempt from capital gains tax? (2 marks)
It is broad and detailed: five taxes and their administration, 40 of the 100 marks in longer questions, and every question compulsory. Steady practice of each computation on the clock is what makes it manageable.
50%, as for every ACCA Qualification exam.
No. The tax rates, allowances and information on certain reliefs are given in the exam. You need to know the rules for using them, such as how the personal allowance is withdrawn and which gifts are exempt.
The supplementary instructions and the tax rates and allowances, as the exam provides them (Finance Act 2025).
| Normal rates | Dividend rates | ||
|---|---|---|---|
| Basic rate | £1 – £37,700 | 20% | 8·75% |
| Higher rate | £37,701 – £125,140 | 40% | 33·75% |
| Additional rate | £125,141 and over | 45% | 39·35% |
| Savings income nil rate band – Basic rate taxpayers | £1,000 | ||
| Savings income nil rate band – Higher rate taxpayers | £500 | ||
| Dividend nil rate band | £500 |
A starting rate of 0% applies to savings income where it falls within the first £5,000 of taxable income.
| £ | |
|---|---|
| Personal allowance | 12,570 |
| Transferable amount | 1,260 |
| Income limit | 100,000 |
Where adjusted net income is £125,140 or more, the personal allowance is reduced to zero.
| Days in UK | Previously resident | Not previously resident |
|---|---|---|
| Less than 16 | Automatically not resident | Automatically not resident |
| 16 to 45 | Resident if 4 UK ties (or more) | Automatically not resident |
| 46 to 90 | Resident if 3 UK ties (or more) | Resident if 4 UK ties |
| 91 to 120 | Resident if 2 UK ties (or more) | Resident if 3 UK ties (or more) |
| 121 to 182 | Resident if 1 UK tie (or more) | Resident if 2 UK ties (or more) |
| 183 or more | Automatically resident | Automatically resident |
Where income is between £60,000 and £80,000, the charge is 1% of the amount of child benefit received for every £200 of income over £60,000.
| The relevant base level of CO2 emissions is 55 grams per kilometre. | |
| The percentage rates applying to petrol cars (and diesel cars meeting the RDE2 standard) with CO2 emissions up to this level are: | |
| 51 grams to 54 grams per kilometre | 16% |
|---|---|
| 55 grams per kilometre | 17% |
| The percentage for electric cars with zero CO2 emissions is 3%. | |
| For hybrid-electric cars with CO2 emissions between 1 and 50 grams per kilometre, the electric range of the car is relevant: | |
| Electric range | |
| 130 miles or more | 3% |
| 70 to 129 miles | 6% |
| 40 to 69 miles | 9% |
| 30 to 39 miles | 13% |
| Less than 30 miles | 15% |
The base figure for calculating the car fuel benefit is £28,200.
The company van benefit scale charge is £4,020, and the van fuel benefit is £769.
Vans producing zero CO2 emissions have a 0% benefit.
The overall investment limit is £20,000.
The rent-a-room relief limit is £7,500.
| Annual allowance – 2022–23 | £40,000 |
|---|---|
| – 2023–24 to 2025–26 | £60,000 |
| Minimum allowance | £10,000 |
| Income limit | £260,000 |
The maximum contribution which can qualify for tax relief without any earnings is £3,600.
| Up to 10,000 miles | 45p |
|---|---|
| Over 10,000 miles | 25p |
| Plant and machinery | |
| Main pool | 18% |
|---|---|
| Special rate pool | 6% |
| Cars | |
| New cars with zero CO2 emissions | 100% |
| Second-hand cars with zero CO2 emissions | 18% |
| CO2 emissions between 1 and 50 grams per kilometre | 18% |
| CO2 emissions over 50 grams per kilometre | 6% |
| Annual investment allowance | |
| Rate of allowance | 100% |
| Expenditure limit | £1,000,000 |
| Enhanced capital allowances for companies | |
| Main pool first year allowance | 100% |
| Special rate pool first year allowance | 50% |
| Structures and buildings allowance | |
| Straight-line allowance | 3% |
Unless otherwise restricted, reliefs are capped at the higher of £50,000 or 25% of income.
| Financial year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Small profits rate | 19% | 19% | 19% |
| Main rate | 25% | 25% | 25% |
| Lower limit | £50,000 | £50,000 | £50,000 |
| Upper limit | £250,000 | £250,000 | £250,000 |
| Standard fraction | 3/200 | 3/200 | 3/200 |
(Upper limit – augmented profits) x standard fraction x taxable total profits / augmented profits
| Profit threshold | £1,500,000 |
|---|
| Standard rate | 20% |
|---|---|
| Registration limit | £90,000 |
| Deregistration limit | £88,000 |
| Days late | Penalty |
|---|---|
| Up to 15 days | None |
| 16 to 30 days | 3% |
| More than 30 days | 6% plus a daily penalty at an annual rate of 10% |
| Nil rate band | £325,000 |
|---|---|
| Residence nil rate band | £175,000 |
| Rate of tax on excess – Lifetime rate | 20% |
| – Death rate | 40% |
| Years before death | Percentage reduction |
|---|---|
| More than 3 but less than 4 years | 20% |
| More than 4 but less than 5 years | 40% |
| More than 5 but less than 6 years | 60% |
| More than 6 but less than 7 years | 80% |
| Lower rate | 18% |
|---|---|
| Higher rate | 24% |
| Annual exempt amount | £3,000 |
| Lifetime limit – business asset disposal relief | £1,000,000 |
|---|---|
| – investors’ relief | £1,000,000 |
| Rate of tax | 14% |
| Class 1 Employee | £1 – £12,570 per year | Nil |
|---|---|---|
| £12,571 – £50,270 per year | 8% | |
| £50,271 and above per year | 2% | |
| Class 1 Employer | £1 – £5,000 per year | Nil |
| £5,001 and above per year | 15% | |
| Employment allowance | £10,500 | |
| Class 1A | 15% | |
| Class 4 | £1 – £12,570 per year | Nil |
| £12,571 – £50,270 per year | 6% | |
| £50,271 and above per year | 2% |
| Official rate of interest | 3·75% |
|---|---|
| Rate of interest on underpaid tax | 8·50% |
| Rate of interest on overpaid tax | 3·50% |
| Taxpayer behaviour | Maximum penalty | Minimum penalty – unprompted disclosure | Minimum penalty – prompted disclosure |
|---|---|---|---|
| Deliberate and concealed | 100% | 30% | 50% |
| Deliberate but not concealed | 70% | 20% | 35% |
| Careless | 30% | 0% | 15% |