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Simon Groom looks at the new CTA exam structure of the Chartered Institute of Taxation

Choice – a good or a bad thing? Discuss!

If we have it we have too much to think about, if we don’t we complain about being forced into something we don’t want to do. As the old saying goes, you can’t please all of the people all of the time, and generally I think we would prefer to have choice than not. On that basis, those of us who like choice will welcome the new CTA structure which gives us plenty more to think about.

Now that the dust is beginning to settle following the launch by the Chartered Institute of Tax (CIOT) of their new CTA exam structure, potential students and firms are beginning to look carefully at their options, which papers to sit, how many exams to take at any one sitting and how to choose a training provider.

Full details of the New Structure can be found on the CIOT’s website at www.tax.org.uk Anyone who is seriously considering sitting the CTA exams is strongly advised to study the detail carefully but for those who want instant gratification here is a quick recap, in 10 simple steps, of the current state of play with the New Structure.

1.  You must sit four, three hour, traditional style tax papers, these will be set in May and November each year.

2.  You must also sit two, one hour, E-Assessments (one on law and one on ethics), yes this means there are more exams than there are now, one in the eye for those of us over a certain age who keep complaining exams are getting easier! These two papers can be sat at any time, a candidate is not restricted by the normal May/November sittings of the tax papers.

3.  The papers are now modular, sit as many or as few as you like at any one sitting.

4.  The cornerstone of the tax papers is the Advisory papers. You must choose two from six and sit a three hour exam on each, more on these later.

5.  You must also sit a three hour Awareness paper “choosing” three modules from five. I use the word “choosing” loosely because in most cases the modules are dictated by the Advisory papers that you choose. Again, more on this later.

6.  Finally you must sit a three hour Application and Interaction paper where you will choose one question from four.

7.  You will receive a credit for any tax paper in which you score 50% or more of the available marks.

8.  These credits are only valid for a set period, in most cases, the next five sittings.

9.  You must sit and pass the E-Assessments before the closing date for entries for the sitting at which you take your last Tax paper.

10. Beware the detail, there are exemptions from some papers and transitional rules – another reason for studying the detail carefully.

The Advisory papers

These are designed to test a candidate’s in-depth knowledge of a particular subject area. For those familiar with the current structure they will be similar to the current Paper II, but remember you must sit two Advisory papers chosen from the following six:

1. Taxation of Individuals

2. Taxation of Owner Managed Businesses

3. Advanced Corporation Tax

4. Inheritance Tax, Trusts and Estates

5. VAT on UK domestic transactions (including SDLT)

6. VAT on cross-border transactions and other Indirect taxes

Each paper lasts for three hours.

The Awareness Paper

This is a three hour paper with five modules as follows:

1. Taxation of Individuals

2. Taxation of Unincorporated Businesses

3. Corporation Tax

4. Inheritance Tax, Trusts and Estates

5. VAT including Stamp taxes

Each module will contain 12 short form questions for 5 marks each, and candidates must answer questions from three modules. In this case there is very little choice because you cannot answer questions from a module in which you have taken, or intend to take, an Advisory paper. For example if you have taken the Individuals and Owner Managed Business Advisory papers, you must answer questions from the Corporation Tax, Inheritance Tax, Trusts and Estates and VAT Awareness modules.

Again, this is not dissimilar to the current paper I

The Application and Interaction Paper

Another 3 hour paper! This time candidates must choose one question from a choice of four. That’s right, just one question to be answered in three hours. When I sat CTA (then known as ATII) we thought having to spend an hour on a question was a tall order; more recently Paper III candidates have had one and a half hours to spend on questions, surely writing for three hours on one question is going a bit far? The rationale for this is that this paper is testing a candidate’s ability to analyse a given scenario, apply their knowledge and communicate effectively their advice to a client, without too much time pressure. In other words more akin to a real life scenario.

The four options are as follows:

1. Taxation of Individuals, Trusts and Estates

2. Taxation of Companies

3. Taxation of Owner Managed Businesses

4. VAT and other Indirect Taxes

This time, unlike the Awareness paper, there is a choice but the obvious question to choose will be based upon the Advisory papers studied. For example if a candidate has taken the Individuals and Owner Managed Business Advisory Papers, then the most likely choice of Application question is the Owner Managed Business option. This will mean there is no new technical knowledge to learn, all a candidate needs to do is to hone their application skills and exam technique.

So, as mentioned a bit earlier, the choice of Advisory papers is the key to everything, it dictates the Awareness modules and gives a strong push towards the Application question. Your choice of Advisory modules will be governed by the area in which you currently work, or intend to work. Just a quick word of warning, there are some obvious choices and a number of weird and wonderful choices. If you do want to sit your two Advisory papers at the same sitting, just make sure this is possible as the CIOT are setting three Advisory papers in the morning, and three in the afternoon. If your choices clash you will not be able to attempt them both at the same sitting, again for more details see http://www.tax.org.uk/ .

The E-Assessments

These two papers are each one hour in length and as mentioned above can be sat at any time. Because they will be online examinations they can be sat at various test centres around the UK by booking a convenient date online. Candidates will be required to answer 60 questions in one hour for each assessment and must answer 40 correctly in order to pass that assessment. Once again, the Law and Ethics can be sat separately or “back to back”.

More Choice!

Now that the exams are truly modular you can choose to sit however many exams you like at different sittings, subject to the constraints mentioned above regarding the Law and Ethics E-Assessments and the ability to carry forward credits from papers already passed.

Once again there are a vast number of combinations that one can think of and I’ve no doubt that students will come up with some that nobody has ever thought of. Some are clearly more sensible than others, let’s look at a couple of the most obvious ones.

A. Sit all four tax papers together

Advantages;

1. It gets them all out of the way at once;

2.  It exploits overlaps between the syllabuses, eg if you are doing Individuals and Owner Managed Business Advisory papers there will be certain overlaps between the topics, it then saves learning them twice. It also means that the technical knowledge required for the Application paper is fresh; and

3.  It avoids the accusation from the more elderly CIOT members that they had to do them all at once so if you split them over more than one sitting you are “wimping out”. (Incidentally anyone suffering this sort of jibe should just point to the amount of legislation that gets examined now. In my day we had just one yellow book and an orange pamphlet!)

B. Split the papers “2 and 2”

If the CIOT has deemed it appropriate to allow a candidate to sit the exams on a modular basis, then why not take advantage of it. The most obvious choice here is to do one Advisory paper and the Awareness paper first and then follow it with the other Advisory paper and the Application paper. The second Advisory paper should match the choice of Application question. For example, let’s say a candidate chooses Owner Managed Businesses and Advanced Corporate Tax as their Advisory papers, and the Taxation of Companies question on the Application paper. It makes sense to sit the Advanced Corporate Tax Advisory paper at the same time as the Application paper to minimise the studying time required for the technical material.

Advantages;

1. It allows more time for studying;

2.  By arranging the papers as suggested above you can take advantage of overlaps in technical knowledge between papers; and

3.  You can concentrate on one Advisory paper at a time, which is where the detailed technical knowledge is examined, reducing the possibility of confusion.

Choosing your training provider

Your choice of training provider is an important decision not to be taken lightly, it is worth spending a bit of time up front weighing up what you get for your money as trying to change your mind after you have booked gets very messy. Here’s a “top ten” list of things to consider:

1.  Just because your provider was successful in helping you get through one set of exams, it doesn’t automatically follow they will be good at CTA. CTA is a very specialist exam requiring specialist tutors.

2.  Does the provider offer a genuine choice of sitting all four at once AND the opportunity to split if required?

3.  The Advisory papers are the key, this is where the detail is required. Ensure you have enough time to study these in depth.

4. Check out their pass rates, ultimately this is the obvious measure of success.

5.  What do you get for your money, and what do you pay extra for? Do your calculations carefully.

6.  Does your provider offer any sort of guaranteed pass scheme? If so look carefully at the conditions.

7.  Online studying is catching on, the ability to study anytime, anywhere without carrying around huge manuals is very appealing. So check out if your provider has any sort of online offering. If so, exactly how much of the syllabus does it cover? Can you try it out beforehand? How does it integrate with any hard copy material that you have?

8.  How easy is it to track your progress? Can you do it online? Can you check online to see if your home study exam script has been received?

9.  Get feedback from others who have used that provider before, personal recommendation is always reassuring, and finally

10. Call the training providers and discuss with them your options and their products, this way you will get a feel for how much they understand about CTA and their products.

The new CTA structure offers candidates new opportunities to gain this highly prestigious qualification, and there has never been a better time to enhance your career and study for the CTA examination.

I wish you luck!

Simon Groom is Head of Tolley Tax Training and can be contacted through their website at http://www.tolleytraining.co.uk/ or on 0207 347 3559. He is also a Council Member of the Association of Taxation Technicians. This article originally appeared in Taxation magazine.