Module Information

This module is a core module to the SMB N310 (Business Finance) UG degree and an optional module to the N400 (Accounting and Finance) UG degree; it is also a popular option module for other UG degree schemes both within and outside the SMB.

The module is designed to provide students with an understanding of the principles underlying the design of an effective taxation system, an introduction to the UK Tax system, deferred taxation and an appreciation of the current policy issues in taxation, including public and private sector financing, which are essential subject matter within any high-quality undergraduate degree in accounting and/or finance; and which are expected by:

• Honours Degree Subject Benchmark Statement: Accounting (2007), Quality Assurance Agency for Higher Education

Further, the module contributes to the maintenance of (or is anticipated to contribute to the achievement of [further]) accreditation from professional accountancy bodies, including:

• Institute of Chartered Accountants in England and Wales
• Association of Chartered Certified Accountants
• Chartered Institute of Management Accountants
• Institute of Chartered Accountants of Scotland

The module is designed to provide students with an understanding of the principles underlying the design of an effective taxation system, an introduction to the UK Tax system, and an appreciation of the current policy issues in taxation.

The module focuses on four main aspects: the economic characteristics and assessment of effective tax system design; a broad description of the UK tax system; international considerations including tax co-ordination, competition and the taxation of e-commerce; conceptual issues in tax planning and the impact of taxation on capital markets.

The module is available to all students from all disciplines. There are no prerequisites and a financial background is not needed.

The following topics are covered:

1. Introduction to taxation; including consideration of the objectives, the operation, scope and evaluation of taxation systems and sources of UK tax law and the classification of taxes.

2. The UK Tax System:

• Income Tax; students need to explain and compute the income tax liabilities of individuals, including the effect of National Insurance contributions and benefits in kind,
• Corporation Tax; students need to explain and compute the corporation tax liabilities of companies and groups of companies, including options for dealing with trading losses,
• Capital Gains Tax; students need to explain and compute chargeable gains arising on companies and individuals
• Inheritance Tax; students need to explain and compute Inheritance tax liabilities of individuals, including quick succession relief,
• Value Added Tax; students need to explain and compute the effects of VAT.

3. Principles of Taxation: Incidence, efficiency, equity, flexibility, certainty, convenience, compliance and administrative costs (obligation of taxpayers, implication of non-compliance and ethical issues)

4. International Taxation: taxation of cross border transactions and interaction between jurisdictions. Topics covered include (but not limited to):

• Factors affecting liability- Domicile, residence, ordinary residence
• Residence principle, Source principle,
• Companies residency
• Double tax relief
• Common avoidance practices- Tax havens, Transfer pricing, Controlled Foreign Corporations.

5. Current issues in tax policy: E-commerce, tax competition- EU actions and OECD and tax harmonization.

6. Principles of tax planning (tax evasion, tax avoidance) and capital market effects of taxation (implicit/explicit taxes).

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