UniGeniusUK taxation

Unofficial practice for the ACCA Taxation (TX-UK) exam. Not affiliated with or endorsed by ACCA.

Practice by topic

Answer each question and check it: every box is marked, with the right answer and an explanation. Topics follow ACCA’s study guide, areas A to F.

Section C

4 questions of 10 and 15 marks, with figures checked and written parts read by Mia. The first is free.

Section C practice

Tax rates and allowances

The supplementary instructions and the tax rates and allowances, as the exam provides them (Finance Act 2025).

Calculations and workings need only be made to the nearest £.
All apportionments should be made to the nearest month.
All workings should be shown in Section C.

Income tax

		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

	£
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.

Residence status

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

Child benefit income tax charge

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.

Car benefit percentage

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%

Car fuel benefit

The base figure for calculating the car fuel benefit is £28,200.

Company van benefits

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.

Individual savings accounts (ISAs)

The overall investment limit is £20,000.

Rent-a-room relief

The rent-a-room relief limit is £7,500.

Pension scheme limits

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.

Approved mileage allowances: cars

Up to 10,000 miles	45p
Over 10,000 miles	25p

Capital allowances: rates of allowance

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%

Cap on income tax reliefs

Unless otherwise restricted, reliefs are capped at the higher of £50,000 or 25% of income.

Corporation tax

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

Marginal relief

(Upper limit – augmented profits) x standard fraction x taxable total profits / augmented profits

Quarterly instalments

Profit threshold	£1,500,000

Value added tax (VAT)

Standard rate	20%
Registration limit	£90,000
Deregistration limit	£88,000

Penalties for late VAT payments

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%

Inheritance tax: tax rates

Nil rate band	£325,000
Residence nil rate band	£175,000
Rate of tax on excess – Lifetime rate	20%
– Death rate	40%

Inheritance tax: taper relief

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%

Capital gains tax: tax rates

Lower rate	18%
Higher rate	24%
Annual exempt amount	£3,000

Capital gains tax: business asset disposal relief and investors’ relief

Lifetime limit – business asset disposal relief	£1,000,000
– investors’ relief	£1,000,000
Rate of tax	14%

National insurance contributions

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%

Rates of interest (assumed)

Official rate of interest	3·75%
Rate of interest on underpaid tax	8·50%
Rate of interest on overpaid tax	3·50%

Standard penalties for errors

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%