Syllabus for MICB - ICB Levels 2 & 3 Bookkeeping (Sage 50 Accounts or Xero) PLUS L4 Self-Assessment Taxation

Paper A1 – Basic double-entry bookkeeping to trial balance

• Underpinning knowledge
  • Knowledge of the different categories of business that exist
  • Terms in bookkeeping (assets, liabilities, etc.)
  • Banking procedures
  • Understanding the different categories of VAT (standard, reduced, zero, exempt, outside the scope)
• Calculation of the value of the capital investment for a sole trader
• Calculation of business documents including calculation of VAT
• Showing an understanding of the effect of entering transactions into a bookkeeping system for sales, purchases, overheads, capital items, returns, personal items, etc.
• The effect of making and receiving payments including bank, cash and petty cash transactions
• Calculation of account balances
• Production and explanation of a trial balance

Paper A2 – Further double entry bookkeeping to trial balance

• Underpinning knowledge
  • Ethics
  • Legislation relevant to the bookkeeper
  • Accounting concepts
  • Understanding the different categories of VAT (standard, reduced, zero, exempt, outside the scope)
• Further double entry including the following
  • Topics from Paper A1
  • The content of control accounts
  • Writing off a bad debt
  • Construction Industry Scheme
  • Posting non-sole trader entries (subscriptions, donations, drawings of partners, directors’ loan accounts, etc.)
• Entry of payroll journals
• Calculation of the value of a suspense account in a system that does not balance
• Reconciliation of debtors, creditors and bank balances
• Correction of errors that do not affect the trial balance
• Production and explanation of a trial balance

Paper A3 – Data entry to trial balance using a computerised accounts package

• Opening of entries
• Entry of cash and credit transactions
• Production of a trial balance
• Production of reports for debtors, creditors, bank, VAT and the audit trail

Paper M4 – reconciliations and final accounts of a sole trader

• Underpinning knowledge
• Reconciliation and correction of errors (customer and supplier reconciliations, bank reconciliation, correction of errors including the clearance of a suspense account balance)
• The calculation of summary figures for control accounts
• VAT Returns (cash and standard VAT returns only but including EU transactions)
• Posting adjustments including disposal and acquisition of fixed assets
• Revaluation of assets
• Final accounts of a sole trader (profit and loss account and balance sheet)

Paper M5 – final accounts of a partnership

• All of the requirements for paper M4 but set in a partnership scenario plus:
• Underpinning knowledge
• Ethical considerations
• Underpinning knowledge of the legal requirements for a partnership
• Final accounts of a partnership including the appropriation account and production of partners’ current accounts
• Calculations and bookkeeping entries to record a change of partnership (partnership ratios, goodwill, the effect on capital and current accounts etc.)

Paper M6 – final accounts of a not-for-profit organisation

• All of the requirements of paper M4 but set in a not-for profit scenario plus:
• Underpinning knowledge regarding not-for-profit organisations
• Understanding the different requirements of a chart of accounts for such an organisation
• Understand the concepts of the different forms of income for not-for-profit organisations including a subscriptions account
• Posting adjustments including the subscriptions account and disposal and acquisition of fixed assets
• Final accounts of a not-for-profit organisation

Paper M7 – Management accounts of incorporated businesses

• Final accounts including adjustments for a limited company (internal management accounts format only)
• Limited liability partnerships
• Calculation and interpretation of ratios

Paper M8 – Level 3 External Assessment

Self-Assessment Taxation:

• Duties and Responsibilities of the Bookkeeper / Tax Agent
• Explain what is meant by the terms: Income Tax, Capital Gains Tax
• Explain the principles of taxation appropriate to individuals, Sole Traders and Partnerships
• Identify the main sources of Income and reliefs for an individual
• Identify the types of returns that may be completed 1.6 Identify sources of assistance

• Identify the main sources of personal income
• Identify the various types of tax reliefs that can be claimed
• Identify the elements of Employment Income and allowable expenses, and complete the relevant pages
• Explain the types of Income from property and allowable expenditure and complete the relevant pages

• Identify the returns that need to be completed by sole traders and partners
• Explain the principle of basis periods applicable to sole traders and partnerships
• Explain the purpose of, and determine, adjusted trading profits for sole traders and partnerships
• Explain the purpose of Capital Allowances (Equipment, Motor Vehicles and Other)
• Identify trading losses for individuals and partnerships
• Complete the partnership return and the relevant section of the self-assessment return
• Complete the relevant sections of the self-assessment return
• Explain the purpose of Simpler Income Tax for the Simplest Small Business and complete the Self-Assessment Return

• Explain the elements of capital gains tax
• Apply relief’s deferrals and exemptions
• Explain the treatment of gains and losses

• Determine taxable income and tax payable
• Identify NI Contributions payable
• Explain the procedure for payment and administration

• Explain how to treat foreign income
• Explain the criteria for residence and remittance