Principles of Taxation (POT)

Module aim

To enable candidates to understand the general objectives of tax and to calculate income tax, national insurance contributions, capital gains tax, corporation tax and VAT in straightforward scenarios.

On completion of this module, candidates will be able to:

• explain the general objectives of tax, the influences upon the UK system of tax, the different types of tax in the UK and recognise the ethical issues arising in the course of performing tax work;
• identify the obligations the UK system of tax imposes on taxpayers and the implications of non-compliance;
• calculate the amount of income tax owed by or owed to individuals and the amount of national insurance payable;
• calculate the amount of capital gains tax payable by individuals and the chargeable gains subject to corporation tax;
• calculate the amount of corporation tax payable by companies; and
• calculate the amount of VAT owed by or owed to businesses.

Method of assessment

The Principles of Taxation module is assessed by a 1.5 hour computer-based exam. The exam consists of 50 questions worth two marks each, covering the areas of the syllabus in accordance with the weightings set out in the specification grid. The questions are presented in the form of multiple choice, multi-part multiple choice, multiple response or numeric entry. The tax tables included in the ICAEW learning materials are provided to candidates on-screen in the exam.

The pass mark of this module is 55%.

Links to other ACA papers

No prior knowledge is required for POT module.

POT provides the basics to progress to TC and BPT.