ACCA TX Common Mistakes & Examiner Insights
TX punishes small errors — a wrong rate, a misread requirement, a relief applied below its limit. Under Finance Act 2025 several rates changed, and old habits cost marks. These are the recurring ones the examiner flags.
1. Payments on account exclude Class 4 NIC
Payments on account are based on the income tax liability only — never include Class 4 NIC in the calculation. This is a classic slip.
2. BADR is 14% under FA 2025, not 10%
Business asset disposal relief rose to 14% under Finance Act 2025. Using the old 10% rate is a common and costly error in the current cycle.
3. Personal allowance taper: £1 for every £2 over £100,000
The personal allowance is reduced by £1 for every £2 of adjusted net income above £100,000, disappearing entirely at £125,140. Get the taper and the cut-off right.
4. Residential property finance costs: basic rate reducer only
Finance costs on residential lettings are given as a basic-rate (20%) tax reducer — they are not deducted from property profit. Deducting them in full is wrong.
5. Part disposals: use the A/(A+B) formula
Always apportion cost using A ÷ (A + B), where A is the proceeds of the part sold and B the market value of the part retained. Never apportion by acreage, size or any physical measure.
6. Share identification: same day, then 30 days, then the pool
Match disposals in strict order — same day first, then acquisitions in the next 30 days, then the s.104 pool. Getting the order wrong changes the gain.
7. Employer NIC: £5,000 secondary threshold under FA 2025
The secondary threshold fell to £5,000 and the employer rate is 15%. Using the old £9,100 threshold or 13.8% rate is a current-cycle error.
8. AIA is never available on cars
Cars never qualify for the annual investment allowance. Use writing-down allowances — 18% main pool, 6% special rate, or 100% FYA only for new zero-emission cars.
9. CLTs vs PETs
A chargeable lifetime transfer is a gift into a discretionary trust; a gift to another individual is a potentially exempt transfer. Classify the transfer correctly before computing IHT.
10. VAT registration: notify within 30 days, effective the 1st of next month
On exceeding the £90,000 threshold, notify within 30 days of the month end; registration is effective from the first of the following month.
Practise these in context: every TX question on GoQualified is mapped to the syllabus with a full worked explanation, so you can see exactly where the marks are. Switch to Exam Sim mode for a timed TX mock exam under real exam conditions. Free, no login.