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KEY POINTS
- A short guide to the new CTA exam structure
- The choice of advisory papers is key
- Advantages of a modular system
- Choose a training provider with care
If we have choice we have too much to think about, but if we do not have choice we complain about being forced into something we do not want to do.
As the saying goes, you can't please all of the people all of the time, but generally I think we prefer to have choice rather than not.
On that basis, those of us who like choice will welcome the new CTA structure which gives us plenty to think about.
Now that the dust is beginning to settle following the launch by the Chartered Institute of Tax of its new CTA exam structure, potential students and firms are beginning to look carefully at their options, e.g. 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. 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 ten simple steps:
- You must sit four, three hour, traditional style tax papers which will be set in May and November each year.
- You must also sit two, one hour, e-assessments (one on law and one on ethics). Yes this means that there are more exams than under the old structure (which is one in the eye for those of us over a certain age who keep complaining exams are getting easier!). The e-assessments can be sat at any time: a candidate is not restricted by the normal May/November sittings of the tax papers.
- The papers are now modular, so you can sit as many or as few as you like at any one sitting.
- The cornerstone of the tax papers are the advisory papers. You must choose two from six and sit a three hour exam on each; more on these later.
- You must also sit a three hour awareness paper, choosing three modules from five. The choice will in most cases be dictated by the advisory papers that you choose, but more on this later.
- Finally you must sit a three hour application and interaction paper where you will choose one question from four.
- You will receive a credit for any tax paper in which you score 50% or more of the available marks.
- These credits are only valid for a set period; in most cases, the next five sittings.
- 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.
- Look out for the detail, there are exemptions from some papers and transitional rules — another reason for studying the detail carefully.
Advisory papers
The advisory papers 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:
- Taxation of individuals
- Taxation of owner managed businesses
- Advanced corporation tax
- Inheritance tax, trusts and estates
- VAT on UK domestic transactions (including stamp duty land tax)
- VAT on cross-border transactions and other indirect taxes
Each paper lasts for three hours.
Awareness paper
This is a three hour paper comprising five modules as follows:
- Taxation of individuals
- Taxation of unincorporated businesses
- Corporation tax
- Inheritance tax, trusts and estates
- VAT including stamp taxes
Each module will contain 12 short form questions for five 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.
This is not dissimilar to the current paper I.
Application and interaction paper
The application and interaction paper also lasts for three hours. This time candidates must choose one question from a choice of four. Yes, that is 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 candidates' 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, the idea of the paper is to be more akin to a real life situation.
The four options are as follows:
- Taxation of individuals, trusts and estates
- Taxation of companies
- Taxation of owner managed businesses
- 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, rather the candidate needs to hone his application skills and exam technique.
So, as mentioned 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.
However, 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 is 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, see the CIOT website.
E-assessments
The two e-assessment papers are each one hour in length and can be sat at any time. Because they are 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 as many exams as 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.
There are a number of combinations that one can think of and I have no doubt that students will come up with some that nobody else has thought of. Some are clearly more sensible than others, but let's look at a couple of the most obvious ones.
Sit all four tax papers together
The advantages of taking all the papers in one sitting are:
- It gets them all out of the way at once.
- It exploits overlaps between the syllabuses, e.g. 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.
- It avoids the accusation from older CIOT members that they had to do all the exams in one sitting, so it is less challenging to split them over more than one sitting. (Incidentally anyone suffering this sort of jibe should just point to the amount of legislation that gets examined now. When I sat the exams we had just one yellow book and an orange pamphlet.)
Split the papers equally
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 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 his 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.
The advantages of doing this are:
- It allows more time for studying.
- By arranging the papers as suggested above you can take advantage of overlaps in technical knowledge between papers.
- You can concentrate on one advisory paper at a time, which is where the detailed technical knowledge is examined, reducing the possibility of confusion.
Training providers
Your choice of training provider is an important decision. It is worth spending a bit of time weighing up what you get for your money before you make your final decision, as trying to change your mind after you have booked the course is not straightforward. Here is a top ten list of things to consider:
- Just because your provider was successful in helping you get through one set of professional exams, it does not automatically follow it will be good at the CTA. The CTA is a very specialist exam requiring specialist tutors.
- Does the provider offer a genuine choice of sitting all four at once and the opportunity to split if required?
- The advisory papers are the key, as this is where the detail is required, so ensure that you have enough time to study these in depth.
- Check out their pass rates; this is the obvious measure of success.
- What do you get for your money, and what do you pay extra for? Do your calculations carefully.
- Does your provider offer any sort of guaranteed pass scheme? If so read the conditions thoroughly.
- Online studying is catching on: the ability to study anytime, anywhere without carrying around huge manuals is very appealing. So check if your provider has an 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?
- 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?
- Get feedback from others who have used that provider before; personal recommendation is always reassuring.
- 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 the CTA and their products.
The new CTA structure offers candidates new opportunities to gain this highly prestigious qualification. 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 its website, or tel: 020 7347 3559. He is also a council member of the Association of Taxation Technicians.
