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Advanced Taxation Coursework Spring 2022
Advanced Taxation Coursework Spring 2022
| ORDER # | 100701 |
| PAPER TYPE | COURSEWORK |
| WRITING LEVEL | UNDERGRADUATE |
| WRITING STYLE | HARVARD |
| # OF SOURCES | 5 |
| # OF PAGES & WORD COUNT | 8 ≈ 2200 WORDS |
Advanced Taxation Coursework Spring 2022 Brief
Part A
It is January 2022 and you are an Assistant Tax Manager at a large firm in Scotland (Ace Chartered Accountants and Tax Advisers). One of the Tax Partners (Iain Thomas) has just come out of a meeting with a new client and would like you to assist him with various matters.
Iain has made the following notes in the meeting, which he passes to you to deal with:
| New client’s details: Callum White White’s Renewables Scarrie IV91 3TU | |
| Trade sector: | renewable energy |
| Current business structure: | sole trader |
| Accounting year-end: | 31st March |
| Currently in a tax avoidance scheme: | disclosed on 2020/21 self-assessment tax return |
| Previous accountant: Mr John Rankin Partner Accounting Matters 59 East Neuk Fisherton AB76 1ZX | |
| Last accounts prepared: | year-ended 31st March 2021 |
| Last self-assessment tax return: | 2020/21 (lodged with HMRC in December 2021) |
| Professional clearance: | Callum White has granted permission to contact |
Annual work required:
- Accounts preparation for the year ending 31st March 2021 onwards
- Preparation of self-assessment tax return for 2021/22 onwards
- Annual fee estimate £1,500 plus VAT
One-off tax advisory work required:
- Incorporation advice
- Tax avoidance versus tax evasion advice
- Fee estimate £2,000 plus VAT
Part A – required
| Details | Words |
| 1. Draft a letter to Callum White, setting him up as a new client with Ace Accountants and Tax Advisers. The letter should be from Mr Iain Thomas, Tax Partner, and must include the following matters: | |
| · Engagement letters (give explanation and instruction to client regarding signature and return – enclose)
· Money laundering procedures (give explanation of regulations and instruction to client regarding specific documents required for identification purposes – enclose list)
· Fee proposal (annual and one-off work to be done and fee estimate)
· Enclosures (not part of word count): 2 x copies of engagement letter*; money laundering documents list
*Note: the covering letter to Callum should state that two copies of the engagement letter are enclosed but you should simply include one copy in your submission; you may use the template letter in Chapter 14 but you must tailor it to the client; there is no need to include standard terms and conditions of business (these will be available on the firm’s website). There is also no need to include any “schedules of services” as the details will be part of the covering letter to Callum. |
360 |
| 2. Draft a letter to Mr John Rankin of Accounting Matters requesting professional clearance and copies of any documents required in connection with Callum White (ensure you specify). The letter should be from Mr Iain Thomas, Tax Partner. | 140 |
| Total words – Part A | 500 |
Coursework Brief
Part B
It is now March 2022 and Callum White has returned the signed engagement letter, delivered his documents for money laundering identification purposes and has agreed the fee proposals. Furthermore, Mr John Rankin of Accounting Matters has provided full professional clearance as well as copies of all requested documents for Callum White.
You have just had a further meeting with Callum and he has provided you with the following information:
Estimates for y/e 31 March 2023: £
Tax adjusted profit (before salary – in company structure) 80,000
Salary required from limited company 12,000
Dividends to be drawn from limited company All available profits
Tax avoidance scheme:
HMRC registration number: 98713X
Name: Efficient investment
Miscellaneous meeting notes:
- client does not understand the difference between tax avoidance and tax evasion;
- he seems to think that if he incorporates his trade, he will pay virtually no tax (based on recent high profile media stories);
- he was persuaded into a tax avoidance scheme by his previous adviser – the scheme was correctly disclosed on his self-assessment tax return under the DOTAS rules, but Callum is unsure what this is all about and whether this means he is evading tax and it will be picked up by HMRC.
Part B – required
| Details | Words |
| 1. Draft a letter to Callum White, providing advice. The letter should be from Mr Iain Thomas, Tax Partner, and must include the following matters: | |
| · Tax planning advice (potential tax and NIC savings which could arise through incorporation*; support your advice with calculations and ensure you both explain the calculations in the letter and make a recommendation)
· Tax avoidance versus tax evasion advice (include an explanation of the difference between avoidance and evasion; ethical considerations; details of the General Anti-Abuse Rule – GAAR; and the Disclosure of Tax Avoidance Schemes – DOTAS rules)
· Enclosure: tax planning calculations (not part of word count)
*Note: assume 2021/22 tax rates and allowances apply; also, whilst there will be chargeable gains implications of incorporation, your calculations and advice should not include this. |
1,500
|
| Words – Part A | 500 |
| Total words – Parts A and B | 2,000 |
Coursework – Marking Scheme
| Part A
| Words | Marks |
| 1. New client set-up letter
| ||
| Engagement letters · Explanation and instructions to client in covering letter; · Enclosure – suitable content; tailored to client | 5 | |
| Money laundering procedures · Explanation and instructions to client; · Enclosure – suitable list of documents for client ID purposes | 5 | |
| Fee estimate · Accuracy and wording | 3 | |
| Overall presentation · Style of language; attention to detail; general presentation; grammar; spelling | 5 | |
| 360 | 18 | |
| 2. Professional clearance letter
| ||
| · Request professional clearance – professional wording · Request copies of relevant documents – specify which | 140 | 7 |
| Total Part A | 500 | 25 |
| Part B
| ||
| 1. Client advice letter
| ||
| Tax planning advice – potential incorporation · Explanation; · Calculations; · Recommendation(s) / other issues |
| 20 20 5 |
| Tax avoidance versus tax evasion · Explanation of difference; · Ethical considerations; · GAAR; · DOTAS rules | 5 5 5 5 | |
| Fee note paragraph · Professional wording | 5 | |
| Overall presentation · Style of language; attention to detail; general presentation; grammar; spelling |
5 | |
| Total Part B | 1,500 | 75 |
| Total Parts A and B | 2,000 | 100 |
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