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Student Insights

Tax compliance

Author: ICAEW Insights

Published: 27 Oct 2022

The Tax Compliance exam is an opportunity to show your competence in several major UK taxes. Here, the Tax Compliance examiners share their tips to help you prepare for the exam.

Know your Principles of Taxation material

If you took this ICAEW CFAB / Certificate Level exam, remember that having succeeded in the objective test questions at this level, most topics follow through to Tax Compliance scenario questions. If you received credit for prior learning from Principles of Taxation, you still need to be confident that you have the knowledge from that exam, updated for the current tax year, going into your Tax Compliance studies.

Know your tax tables

The tables are there so that there is less for you to remember on the day. Practise using them throughout your studies so that you know what is there to help you, and how to find your way there quickly. Make sure you know where to find rates, dates and deadlines for all taxes within the Hardman’s Tax Rates and Tables permitted text. Tax Compliance tests administration of tax, with some admin topics new at this level, and often these marks can be gained from using the tables.

Know the material

Anything in the study manual can be tested. There are not really ‘core’ and ‘fringe’ areas. In recent exams, some written questions relating to admin in particular have not scored well at all, with many students omitting to answer these. Some students recently have only been attempting the numerical questions, limiting their chances of passing overall. A Tax Compliance exam will always have more computational than written marks, but knowledge-based written questions offer some of the easiest marks to students who know the material.

Know your pro formas

Memorising pro formas will save you time in the exam to focus on content. On average, the corporation tax pro forma is not as well known as those for income tax and capital taxes. They all deserve the same amount of learning.

Know your Chapter 1

Chapter 1 of the Tax Compliance workbook deals with ethical and some regulatory rules. Material from this chapter accounts for at least 7% and up to 10% of the total marks. There is little here that can be guessed. Practice every ethics question that you can possibly access. This could be a great start to your exam.

Know the discreet rules for corporation tax

Remember corporation tax is worth 20% of the total marks – this cannot be ignored. Setting up the pro forma correctly, whether it is for a company with many income sources, losses, overseas tax, or a period of more than 12 months, will enable you to pick up certain marks just by filling figures from the question into the correct lines of your pro forma. Although income tax and corporation tax both have adjustments of profits and capital allowances, spend time on knowing the differences (for example, when to consider R&D, private use, dividends and super deductions).

Practise, practise, practise!

Practise as many past exam questions as possible and do them to time. If you run out of time but have more to write then carry on writing. Highlight the content written after the time elapsed. When you go back to mark you can compare the marks you could get in the time with the total marks you were capable of obtaining. This means that you can check your knowledge, but also find ways to speed up in answering. Question practice is an essential part of preparation for any exam. This is truer than ever for students whose learning to date has been impacted by the pandemic. Many will have sat fewer exams than expected, been tested on a narrower syllabus, or had concessions such as open book or untimed exam sittings at university. All of which makes for a bigger step up to ACA Professional Level exams.

A crucial part of your practice is familiarising yourself with the exam software. Make sure you always copy workings from the spreadsheet area into the word-processing area, otherwise they cannot be seen and marked by the examiner. Make this become second nature before the exam day. Access the practice software and mock exams at icaew.com/examresources