Level 4 AAT Professional Diploma in Accounting (Distance Learning) – Unit in Business Tax

This unit introduces students to UK taxation relevant to businesses. Students will understand how to compute business taxes for sole traders, partnerships and limited companies. They will also be able to identify tax planning opportunities while understanding the importance of maintaining ethical standards.

In learning how to prepare tax computations, students will gain the skills required to apply the tax treatment of capital expenditure and the adjustment of accounting profits for tax purposes. Students will allocate profits to tax years and advise clients on the implications of changing their accounting year end date. In addition, students will allocate profits between partners in a partnership and will calculate National Insurance (NI) contributions for the self-employed, advising clients on the tax implications of making losses.

Students will understand the administrative requirements of UK tax law, including the implications of errors in tax returns, late filing of returns, late payment of tax and not retaining records for the required period. Students will compute tax on the sale of capital assets by companies and will understand the capital gains implications of the sale of a business and the tax reliefs available to businesses.

Tax advice is an important part of many accountancy roles in recognising tax planning opportunities for businesses. Students will discuss the ethical issues facing business owners and managers in reporting their business tax and the responsibilities that an agent has in giving advice on tax issues to business clients.

This unit is optional in the Level 4 Diploma in Professional Accounting.