Allowable And Disallowable Expenditure

Question 1

Capital expenditure

Answer 1

Disallow

Question 2

Revenue expenditure

Answer 2

Allow

Question 3

Capital allowances

Answer 3

Allow

Question 4

Depreciation

Answer 4

Disallow

Question 5

Donation to local charity

Answer 5

Allow

Question 6

Employee costs

What does this include

Answer 6

Allow

Salary, bonus, pension contributions, BIK, employers NIC, redundancy pay, compensation for loss of office

Question 7

Donations to political parties

Answer 7

Disallow

Question 8

Drawings

Answer 8

Disallow

Question 9

Entertaining (business)

Answer 9

Disallow

Question 10

Fines not incurred by employees while working for business

Answer 10

Disallow

Question 11

Entertaining(employees)

Answer 11

Allow

Question 12

Fines incurred by employees while working for business

Answer 12

Allow

Question 13

Gifts

Answer 13

Disallow

Question 14

What is an allowable gift

Answer 14

Bearing a conspicuous advertisement for donor, costing £50 or less per person and not food, drink, tobacco or a token or voucher exchangeable for goods

Question 15

Legal fees relating to recovery of bad debts

Answer 15

Allow

Question 16

Legal fees relating to renewal of short lease <= 50 years

Answer 16

Allow

Question 17

Legal fees relating to defence of title

Answer 17

Allow

Question 18

Legal fees relating to capital items

Answer 18

Disallow

Question 19

Legal fees relating to trade agreements

Answer 19

Allow

Question 20

Legal fees relating to debt finance

Answer 20

Allow

Question 21

Legal fees relating to acquisition of PPE

Answer 21

Disallow

Question 22

Political subscriptions

Answer 22

Disallow

Question 23

Trade subscriptions

Answer 23

Allow

Question 24

What type of theft is allowed

Answer 24

Theft by employee who did not have control over the business

Question 25

Accounting fees re personal taxation

Answer 25

Disallow

Question 26

Financial and management accounting and audit fees

Answer 26

Allow

Question 27

Pre commencement expenses (up to 7 years)

Answer 27

Allow

Question 28

Repairs, renewals and maintenance of property

Answer 28

Allow

Question 29

Amortisation of leasehold property

Answer 29

Disallow

Question 30

Legal charges relating to purchase of own shares

Answer 30

Disallow

Question 31

Professional charges re taxation appeal

Answer 31

Disallow

Question 32

Car insurance personal use

Answer 32

Disallow

Question 33

Redecorating existing premises which were usable

Answer 33

Allow

Question 34

Accounting fees re tax compliance

Answer 34

Allow

Question 35

Repairs to new office required to make it usable

Answer 35

Disallow

Question 36

Management accounting

Answer 36

Allow

Question 37

QCD

Answer 37

Disallow

Question 38

Amortisation of a patent used in trade

Answer 38

Allow

Question 39

Amortisation of goodwill

Answer 39

Disallow

Question 40

Donation to local school

Answer 40

Allow

Question 41

Legal fees re employment dispute

Answer 41

Allow

Question 42

Employers national insurance

Answer 42

Allow

Question 43

Sales refunds

Answer 43

Disallow

Question 44

Credit sales

Answer 44

Disallow

Question 45

Pension contribution for owner of sole trade

Answer 45

Disallow

Question 46

Dinners for staff

Answer 46

Allow

Question 47

Furniture for staff and clients to use in shop

Answer 47

Disallow

Question 48

Profit on disposal of PPE measured at

Answer 48

Proceeds - NBV

Question 49

Disposal of PPE measured at

Answer 49

Proceeds limited to original cost

Question 50

Are fuel costs apportioned for private use

Answer 50

Yes