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Tax Compliance > Allow Or Disallow Deductions Vs Trade Profs > Flashcards

Allow Or Disallow Deductions Vs Trade Profs Flashcards

1
Q

New capital expenditure

A

Disallow

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2
Q

Repairs and maintenance

A

Allow

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3
Q

Profit/ loss of capital items on disposal

A

Disallow

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4
Q

Depreciation

A

Disallow

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5
Q

Pay friends/ family out of profits

A

Allow

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6
Q

Sole trader drawings

A

Disallow

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7
Q

Partner salaries

A

Disallow

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8
Q

General provision for bad debt

A

Disallow

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9
Q

Provision for non trade bad debts

A

Disallow

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10
Q

Specific provisions for trade bad debts

A

Allow

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11
Q

Staff entertaining

A

Allow

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12
Q

Client entertaining

A

Disallow

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13
Q

What gifts are allowable (3)

A

Gifts to employees

Gifts of trade sample

Gift to customers if
Conspicuous advert
Non food/drinks/tobacco
Cost <50 per customer

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14
Q

What types of donations are allowable expenditure (3)

A

Small donations to local charities

Stock/ plant gifted to charities

Subscriptions to professional associations

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15
Q

Parking fine incurred by employee in course of business

A

Allow

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16
Q

Interest paid on late tax

A

Disallow

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17
Q

When are legal costs allowable (2)

A

Renewing short lease <50 years

Legal costs of registering a patent

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18
Q

Cost of registering patent

A

Allow

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19
Q

Incidental costs of raising debt finance

A

Allow

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20
Q

Irrecoverable VAT on disallowed expenditure

A

Disallow

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21
Q

Class 1A NICs and employer pension contributions

A

Allow

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22
Q

Redundancy payments in excess of 4* statutory redundancy pay

A

Disallow

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23
Q

When are car leasing and rental costs disallowed

A

Any element relating to private use by sole trader

15% of lease cost if > 50g/km
110g/km if leased pre April 21

24
Q

Replacing single glazed window with double glazed window

25
Q

Interest received on business account

26
Q

Gift aid donation

A

Disallow

Then extend the bands with grossed up amount

27
Q

Servicing plan for a car used by the business

28
Q

Sole trader pension contributions

A

Disallow as drawings

29
Q

Trade debts written off

30
Q

Increase is provision for specific bad debts

31
Q

Recovery of loan to former employee previously written off

32
Q

Legal fee for preparing tax return

33
Q

What is allowable for a car lease of 4000, used 30% business use

A

400085%30%

34
Q

Redecoration of partnership offices

A

Not allowable

35
Q

Bank overdraft

36
Q

Interest on loan to purchase a factory used in trade

37
Q

Professional fees relating to purchase of machinery

38
Q

Professional fees relating to registering a patent

39
Q

Interest received on business bank account

A

Disallow - NTLR

40
Q

Increase in general provision

41
Q

Legal fees relating to purchase of new home for sole trader which is used as 10% storage for the business

A

Disallow all - capital expenditure

42
Q

Decoration of premises

A

Allow - classed as maintenance

43
Q

Political donation

44
Q

Defending action for alleged faulty goods

45
Q

Debt collection fees

46
Q

Accountancy fees

47
Q

Speeding fine by employee making deliveries

48
Q

Rent relating to next period if you have low profits

49
Q

Interest on loan taken out to fund lease of new business premises

50
Q

New windows required to make building premises usable

A

Not allowable - CAPEX

51
Q

Advertisement in newspapers

52
Q

Staff party for £200 each

A

£200 allowable each

53
Q

How many times above statutory redundancy payments are you allowed to deduct from TP

54
Q

Goodwill impairment

A

Disallow the expense

55
Q

Profit on disposal of copyright used in trade

A

Allow as a profit

56
Q

Legal cost of registering a patent

57
Q

Legal fees relating to new supplier contract

Tax Compliance (13 decks)

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