Tx notes fa22 Final

June 2023 to March 2024 exams
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Example 1 
Identify which taxes apply to the following situations and state whether the tax is direct or 
indirect: 
(a)
A sole trader earns £100,000 profit in a year
(b)
A company has profit of £250,000 in a year and employs 30 employees
(c)
An individual sells an antique table for £100,000 which cost £40,000 eight years ago
(d)
A business buys raw materials from a supplier
(e)
A company sells a factory for £750,000 bought for £250,000 three years ago
(f)
An individual dies and bequeaths his estate of £1,000,000 to his children 

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June 2023 to March 2024 exams
Watch free ACCA TX lectures
Chapter 2
INCOME TAX COMPUTATION 
1. Introduction 
An income tax computation is prepared for each tax payer and records the income to be taxed for 
that individual for a tax year.
The tax year runs from April 6 to following April 5. Therefore the tax year 2022/23 runs from 6 April, 
2022 to 5 April, 2023. Each source of taxable income requires its own basis of assessment to 
determine how much of that income is to be assessed to tax in each such tax year.
One of the 15 mark questions in section C of the exam will be on income tax which in many cases 
will require the candidate to prepare an income tax computation.
2. Computation of Taxable Income 
There are two main parts to the Income Tax computation; 
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firstly the computation of the taxpayer’s Taxable Income and 
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secondly the calculation of the Income Tax Liability and/or Income Tax Payable thereon.
The Taxable Income will be divided into three possible analysis columns; 
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Dividend income, 
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Savings Income (which is interest income) and 
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Non-Savings Income which will be made up of employment income, trading profits of the self-
employed and property income. 
This analysis is required as di
ff
erent tax rates may apply to the di
ff
erent types of income.
This proforma is the expected layout for your answers in the exam - it is important that this and all 
proforma are laid out neatly, well labeled and presented.

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