How to Pass the ICAEW ACA Business Planning: Tax (BPT) Exam (2020)

Summary

This article offers our top five tips on how to pass the ACA Business Planning: Tax (BPT) exam. The advice contained in this article is taught as part of our popular BPT classroom course which has seen several attendees scored over 95% in the BPT exam. Written by an ACA tutor who won multiple ICAEW prizes as a student, including one for Tax, this is a must read for any student preparing for their BPT exam.

Tip 1 – When starting your BPT preparation, ensure that your Tax Compliance (TC) knowledge is at least at the same level as when you passed TC

The BPT exam requires students to advise individuals and businesses on UK tax matters. Clearly, this requires a good understanding of UK tax rules and the majority of these rules were already covered in the TC exam. In fact, around 60-70% of the marks in the BPT exam are for technical matters already tested in the TC exam.

It is therefore strongly advised that your BPT preparation begins with re-learning of the TC technical content for each tax. As we consider this to be such a fundamental part of BPT preparation, we provide our online and classroom students with access to our TC tutorials to give them a head start. Our experience is that students who complete this preparatory work find the advanced BPT content much easier to understand and apply. This then enables them to focus on exam technique from an earlier stage which leads them to higher marks.

Tip 2 – Identify which ‘scenarios’ are commonly tested

The BPT exam requires students to advise individuals and businesses on UK tax matters in ‘real-world’ scenarios. In practice, there are several tax matters which individuals and businesses frequently need advice on, such as:

• Whether a start-up business should incorporate or operate as an unincorporated business
• Whether an existing business should incorporate
• How an incorporated business can distribute returns to director-shareholders tax efficiently
• How to pass assets to children without triggering a tax charge
• The optimal use of a tax loss for a large corporate group
• Whether an internationally expanding business should set up a subsidiary company or a branch

These common ‘real-world’ scenarios are also the scenarios examiners use in the BPT exams. Unlike TC, BPT does not usually require students to calculate the tax liability for a single tax. Instead, BPT requires students to advise on all tax matters. Therefore, by practicing lots of past exam questions you will soon start to see which scenarios are commonly tested and which taxes apply to each. This should enable you to develop a broader understanding of tax and an ability to identify the tax implications of various scenarios.

Tip 3 – Practice several exam questions of the same scenario one after another

After using lots of past BPT exams to teach our students the optimal exam technique for a particular type of BPT exam scenario, we send our students away to practice lots exam questions on a similar scenario. For example, after being taught the technical content and exam technique for business incorporation, our students then practice several other past paper incorporation questions one after another.

This has the following benefits:

• It familiarises you with how the examiners structure scenarios and questions
• It enables you to identify patterns in how the scenario is examined
• It enables you to apply the exam technique demonstrated during tuition
• It improves your efficiency when using the open book notes
• It enables you to identify weakness areas so that you can focus your technical learning and exam technique development on a particular area
• It familiarises you with the ICAEW CBE software
• It enables you to improve your speed so that you don’t exceed your time allocation

Our BPT Master Plan categorises all the past exam questions by scenario/topic to make it easy to practice lots of questions on the same scenario/topic.

To give you an insight, a sample from the Capital Taxes section of our BPT Masterclass course can be found below. All our classes teach the technical content in the context of how it is likely to be examined before demonstrating how to answer exam questions on the topic.

Tip 4 – Structure your open book notes so that they can be used effectively and time-efficiently in the exam

Open book exams present both a golden opportunity and fatal time trap. The BPT exam is incredibly time pressured so any time spent looking something up in your notes is time which could have been spent typing a mark scoring point. Therefore, your open book notes need to be concise and structured in a way that you can quickly look up information should you need to.

Given the technical nature of tax, we advise that notes include a summary of the key technical points for each tax. As the same scenarios come up time and time again in the BPT exam, it is highly recommended that you have a reminder of common points to consider including for each scenario. The example below, taken from our BPT Open Book Notes, demonstrates what we mean by this. Our students constantly feedback that this is an incredibly valuable resource in the exam as it enables them to include lots of points and cover the full breath of taxes.

As mentioned above, any time spent looking something up in your notes is time which could have been spent typing a mark scoring point. Therefore, you should aim to build your tax knowledge and to a level where you use the open book notes sparingly as this will enable you to type more in the exam. Personally, other than the Common Exam Scenario reminder section, I only use the Open Book Notes if a very technical matter comes up, such as whether a company repurchase of shares should be treated as capital or income on the individual shareholder.

Tip 5 – Bag the relatively easy ethics marks

Ethics is examined is all the ACA exams and whilst ethics questions do get harder as the ACA progresses, the ethics marks remain comparatively easier to the technical marks. BPT exams include up to 10 marks for ethics which equates to 18% of the marks needed to secure a 55% passing grade. Therefore, comparatively easy ethics marks offer the opportunity to bag 18% of the marks you need to pass - in what our opinion is - the hardest ACA Professional Level exam.

The most efficient exam strategy is to ensure that you have an exam technique which will ensure that you make the ten points needed to get maximum marks for ethics.

Need Help Passing the ACA BPT Exam?

Our BPT classroom and online courses focus on the most frequently examined technical content and demonstrate the optimal exam technique for each type of BPT question. Sample classes from the course, our BPT Open Book Notes and our BPT Master Plan can be found here.

About the Author

Kieran Doe is a Senior ACA Tutor at ACA Masters. Kieran won ICAEW prizes for his performance in Financial Accounting and Reporting, Tax, Financial Management, Audit, Business Strategy and Case Study. This is in addition to winning several prizes at university for various Accounting, Management, Business and Economics subjects.

Kieran’s tuition is based around the learning techniques and exam strategies which enabled him to win prizes for all the subjects he teaches. Under his guidance, several of his ACA students have also won ICAEW prizes.