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TX Accumulated Knowledge > B Tax Adjusted Profit Walkthrough > Flashcards

B Tax Adjusted Profit Walkthrough Flashcards

1
Q

Advice on labour contracts paid 3 years prior to setting up a business (Allowable or disallowable)?

A

Allowable, not added back

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2
Q

Advertising costs incurred in the 6 months prior to setting up a business (Allowable or disallowable)?

A

Allowable

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3
Q

Legal fees on a building to be converted to a shop for trading incurred 2 years prior to setting up a business (Allowable or disallowable)?

A

Disallowable

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4
Q

Capital allowances on a car that was purchased 6 years ago and is now used in the business (Allowable or disallowable)?

A

Allowable

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5
Q

When are legal fees allowable?

A

When they are revenue based, not capital

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6
Q

Wages and salaries (Allowable or disallowable)?

A

Allowable if fair

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7
Q

Heat and light (Allowable or disallowable)?

A

Allowable

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8
Q

Motor expenses (Allowable or disallowable)?

A

Allowable

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9
Q

Genuine repairs (Allowable or disallowable)?

A

Allowable

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10
Q

Cost of replacing asset or significant expenditure (Allowable or disallowable)?

A

Disallowable

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11
Q

Incidental costs (e.g. legal expenses) for non-current assets (Allowable or disallowable)?

A

Disallowable

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12
Q

Incidental costs (e.g. legal expenses) of renewing an existing short lease (50 or fewer years) (Allowable or disallowable)?

A

Allowable

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13
Q

Staff entertaining (Allowable or disallowable)?

A

Allowable

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14
Q

Gifts which bear an advertisement for the business, cost <£50 and aren’t food, drink or tobacco (Allowable or disallowable)?

A

Allowable

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15
Q

Donations to political parties (Allowable or disallowable)?

A

Disallowable

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16
Q

Small donations to local bodies (Allowable or disallowable)?

A

Allowable

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17
Q

Business portion of leasing costs (Allowable or disallowable)?

A

Allowable

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18
Q

Private portion of leasing costs (Allowable or disallowable)?

A

Disallowable

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19
Q

Leasing costs of a car with CO2 emissions exceeding 50 grams/km (Allowable or disallowable)?

A

Disallowable by adding back 15% of the leasing costs

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20
Q

Accountancy fees for preparing an individual’s personal tax return (Allowable or disallowable)?

A

Disallowable

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21
Q

Accountancy fees for preparing the business accounts (Allowable or disallowable)?

A

Allowable

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22
Q

Legal fees in connection with capital expenditure (Allowable or disallowable)?

A

Disallowable

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23
Q

Legal fees in connection with capital expenditure in the renewal of a short lease (50 or fewer years) (Allowable or disallowable)?

A

Allowable

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24
Q

Legal fees of a revenue nature in connection with any trade purposes (Allowable or disallowable)?

A

Allowable

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25
Q

Costs incurred by a sole trader in travelling from home to workplace (Allowable or disallowable)?

A

Disallowable

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26
Q

Other business travel expenses (Allowable or disallowable)?

A

Allowable

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27
Q

Subsistence costs (Allowable or disallowable)?

A

Disallowable

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28
Q

Expenses incurred by a sole trader on subsistence while travelling for business purposes (Allowable or disallowable)?

A

Allowable

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29
Q

Telephone expenses or motor expenses (Allowable or disallowable)?

A

Private use is disallowable, business use is allowable

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30
Q

The cost of setting up a website (Allowable or disallowable)?

A

Disallowable

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31
Q

The costs of updating the website (Allowable or disallowable)?

A

Allowable

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32
Q

Fines and penalties (Allowable or disallowable)?

A

Disallowable

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33
Q

A parking fine for an employee incurred while on business (Allowable or disallowable)?

A

Allowable

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34
Q

Costs resulting from fraud by proprietors (Allowable or disallowable)?

A

Disallowable

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35
Q

The cost of petty theft and pilferage not covered by insurance (Allowable or disallowable)?

A

Allowable

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36
Q

Impairment losses on non-trade debts (e.g. write-off loans) (Allowable or disallowable)?

A

DIsallowable

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37
Q

Impairment losses on trade debts (Allowable or disallowable)?

A

Allowable

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38
Q

Interest payable on loans taken out for non-trade purposes (Allowable or disallowable)?

A

Disallowable

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39
Q

Interest payable on loans taken out for trading purposes (Allowable or disallowable)?

A

Allowable

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40
Q

Cash withdrawn by a proprietor of an unincorporated business that constitutes remuneration (Allowable or disallowable)?

A

Disallowable

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41
Q

Remuneration of a company director (Allowable or disallowable)?

A

Allowable

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42
Q

Personal use (by proprietor of an unincorporated business) of business assets (Allowable or disallowable)?

A

Disallowable

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43
Q

Personal expenses of a proprietor of an unincorporated business paid by the business (Allowable or disallowable)?

A

Disallowable

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44
Q

Private element of rent? (Allowable or disallowable)?

A

Disallowable

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45
Q

Council tax? (Allowable or disallowable)? Job-related

A

Disallowable

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46
Q

Personal pension contributions (Allowable or disallowable)?

A

Disallowable

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47
Q

Redecoration of private rooms (Allowable or disallowable)?

A

Disallowable

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48
Q

New fittings for shop (Allowable or disallowable)?

A

Disallowable

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49
Q

Selling price of received goods for his own use? (Allowable or disallowable)?

A

Disallowable

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50
Q

Running costs of motor expenses (Allowable or disallowable)?

A

Allowable

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51
Q

Business rates (Allowable or disallowable)?

A

Allowable

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52
Q

Profit on sale of machinery?

A

Deducted

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53
Q

Savings income?

A

Deducted

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54
Q

Capital allowances?

A

Deducted

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55
Q

Debt collection (Allowable or disallowable)?

A

Allowable

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56
Q

Professional subscriptions to approved bodies (Allowable or disallowable)?

A

Allowable

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57
Q

Payroll gift to charity (Allowable or disallowable)?

A

Allowable

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58
Q

Contributions to an occupational pension scheme (Allowable or disallowable)?

A

Allowable

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59
Q

Entertaining which is treated as allowable by the employer (Allowable or disallowable)?

A

Disallowable

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60
Q

Travelling from home to a temporary workplace? (Allowable or disallowable)?

A

Allowable

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61
Q

When mileage allowance received - statutory amount is positive?

A

It is assessable

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62
Q

When mileage allowance received - statutory amount is negative?

A

It is allowable

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63
Q

Entertaining which is treated as disallowable by the employer (Allowable or disallowable)?

A

Allowable

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64
Q

Use of own car for business purposes (Allowable or disallowable)?

A

Allowable

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65
Q

Working from home (Allowable or disallowable)?

A

Allowable

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66
Q

Expenses tainted by duality of purpose (Allowable or disallowable)?

A

Disallowable

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67
Q

The costs of training to obtain a professional qualification where
paid by the employee themself (Allowable or disallowable)?

A

Disallowable

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68
Q

Cost of clothes for work (Allowable or disallowable)?

A

Disallowable

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69
Q

Golf membership?

A

DisallowIable

70
Q

Interest paid?

A

Allowable

71
Q

Entertainment expenses to customers?

A

Disallowable

72
Q

Depreciation?

A

Disallowable

73
Q

Interest received?

A

Deductible

74
Q

Chaffeur?

A

Disallowable

75
Q

Item less than £50?

A

Allowable

76
Q

Pension lump sum in employment income?

A

Allowable

77
Q

Council tax?

A

Allowable

78
Q

Letting fees (property)

A

Allowable

79
Q

Insurance (property)

A

Allowable

80
Q

When expense is a capital cost (property)

A

It is not allowable

81
Q

Water charges (property)

A

Allowable

82
Q

council tax (residential property)

A

Allowable

83
Q

Business rates (commercial property)

A

Allowable

84
Q

Repairs of a revenue nature

A

Allowable

85
Q

Payroll gifts to charity (employment)

A

Allowable

86
Q

Employee contributions into occupational (employment)

A

Allowable

87
Q

Susbcription to professional bodies (employment)

A

Allowable

88
Q

Repairs when the purchase price was discounted?

A

Disallowable

89
Q

A contribution into an employer’s occupational pension scheme?

A

Allowable

90
Q

A charitable donation made under the payroll deduction scheme?

A

Allowable

91
Q

What haoppens with selling proce of goods taken for own use?

A

Disallowed (added back)ded back but it’s not disallowable expenditure

92
Q

What happens with income not taxed as trading income?

A

Deducted

93
Q

What happens with additional expenditure not already included in accounts?

A

Deducted

94
Q

Allowable deduction for the short lease premium paid?

A

Income element of lease premium / Length of the lease

95
Q

Capital expenditure (allowed/disallowed)?

A

Disallowed

96
Q

Accounting estimates (allowed/disallowed)?

A

Disallowed

97
Q

Revenue expenditures constituting an appropriation of profit by a proprietor rather than a business expense (allowed/disallowed)?

A

Disallowed

98
Q

Genuine repairs? (Allowable/disallowable)

A

Allowable

99
Q

The cost of replacing the entirety of an asset or making a significant alteration or improvement to an asset? (Allowable/disallowable)

A

Disallowable

100
Q

Repairs to newly-acquired second-hand assets where the purchase price is reduced to account for dilapidations (Allowable/disallowable)

A

Disallowable

101
Q

Asset is not capable of trading use before the repairs are completed (Allowable/disallowable)

A

Disallowable

102
Q

Incidental costs (e.g. legal expenses) incurred in attempts to acquire non-current assets (aborted or non-aborted) (Allowable/disallowable)

A

Disallowable

103
Q

Replacing part of an asset (Allowable/disallowable)

A

Allowable

104
Q

Subscriptions not trade or professional (Allowable/disallowable)

A

Disallowable

105
Q

Subscriptions for trade or professional (Allowable/disallowable)

A

Allowable

106
Q

Staff entertaining? (Allowable/disallowable)

A

Allowable

107
Q

Business free samples? (Allowable/disallowable)

A

Allowable

108
Q

Gifts that cost <£50 per donee per year? (Allowable/disallowable)

A

Allowable

109
Q

Gifts to employees? (Allowable/disallowable)

A

Allowable

110
Q

Donations to political parties? (Allowable/disallowable)

A

Disallowable

111
Q

Donation wholly and exclusively for trading purposes? (Allowable/disallowable)

A

Allowable

112
Q

Business portion of leasing costs? (Allowable/disallowable)

A

Allowable

113
Q

Leasing costs of a car with CO2 emissions exceeding 50 grams/km? (Allowable/disallowable)

A

15% is disallowed

114
Q

Accountancy fees for preparing an individual’s personal tax return? (Allowable/disallowable)

A

Disallowable

115
Q

Accountancy fees for the preparation of the business accounts? (Allowable/disallowable)

A

Allowable

116
Q

Accountancy fees incurred in dealing with an HMRC enquiry? (Allowable/disallowable)

A

Disallowable

117
Q

Legal fees in connection with capital expenditure (Allowable/disallowable)?

A

Disallowable

118
Q

Legal fees in the renewal of a short lease (Allowable/disallowable)?

A

Allowable

119
Q

Legal fees of a revenue nature in connection with any trade purposes (Allowable/disallowable)?

A

Allowable

120
Q

Costs incurred by a sole trader in travelling from home to workplace (Allowable/disallowable)?

A

Disallowable. But other travelling expenses are generally allowable

121
Q

Subsistence costs not wholly and exclusively for the purposes of the trade (Allowable/disallowable)?

A

DIsallowable

122
Q

Telephone expenses or motor expenses (Allowable/disallowable)?

A

Private use is disallowed

123
Q

Cost of setting up a website (Allowable/disallowable)?

A

Disallowable

124
Q

Costs of updating the website (Allowable/disallowable)?

A

Allowable

125
Q

Costs resulting from fraud by proprietors (Allowable/disallowable)?

A

Disallowable

126
Q

Cost of petty theft and pilferage not covered by insurance (Allowable/disallowable)?

A

Allowable

127
Q

Impairment losses on non-trade debts (Allowable/disallowable)?

A

Disallowable

128
Q

Impairment losses on trade debts (Allowable/disallowable)?

A

Allowable

129
Q

Interest payable on loans taken out for non-trade purposes (Allowable/disallowable)?

A

Disallowable

130
Q

Interest on late paid tax (Allowable/disallowable)?

A

Disallowable

131
Q

Interest payable on loans taken out for trading purposes (Allowable/disallowable)?

A

Allowable

132
Q

Letting agent fees (allowable/disallowable)?

A

Allowable

133
Q

SBA (allowable/disallowable)?

A

Allowable

134
Q

Interest paid is deducted in income tax computation?

A

After non-savings and savings

135
Q

Workplace nursery (allowable/disallowable)

A

Allowable

136
Q

Use of employer’s asset is employment tax working?

A

Mutliply value by 20%

137
Q

Legal fees in conenction with acquisition of a freehold building (allowable/disallowable)

A

Disallowable

138
Q

Motor expenses for private use (allowable/disallowable)?

A

Disallowable

139
Q

Motor expenses for business use (allowable/disallowable)?

A

Allowable

140
Q

Health club membership (allowable/disallowable)?

A

Disallowable

141
Q

Leasing costs?

A

Deducted

142
Q

When is a beneficial loan exempt?

A

When it doesn’t exceed £10000

143
Q

Is salary time apportioned?

A

FUCKING YES

144
Q

Class 1 employee %?

A

12% where upper limit £50270, includes PA

2%

145
Q

Class 1 employer %?

A

13.8%, lower limit is £9100

146
Q

Class 4 %?

A

9% where upper limit £50270, includes PA

2%

147
Q

Company van benefit?

A

£3960, and is time apprtioned

148
Q

Benefit of living accommodation is higher of?

A

Annual value and rent paid

149
Q

How long can unused pension allowances be carried back for?

A

3 years

150
Q

What happens with gross pensino contributions?

A

Adjust the rate limits and are deducted to get the ANI

151
Q

Excess subject to annual allowance tax charge calculation?

A

Contributions - unused annual allowance

152
Q

Use of office (allowable/disallowable)?

A

Allowable

153
Q

Benefit for use of an asset calculation?

A

Amount * 20% * time apportion

154
Q

What is exempt in job related accommodation?

A

Annual value and additional charge

155
Q

Council tax in job related accommodation (allowable/disallowable)?

A

Disallowable

156
Q

Council tax in non job related accommodation (allowable/disallowable)?

A

Allowable

157
Q

What is the employment allowance?

A

£5000

158
Q

Where is employment allowance not available?

A

If a director is the only employee with earnings subject to Class 1 NI

Business whose total employer NIC liability in the previous tax year was over £100,000

159
Q

Entertainment expenses for customers?

A

Disallowable

160
Q

Private car expenses?

A

Disallowable

161
Q

Entertainment expenses for staff?

A

Allowable

162
Q

Donation to local school fair in exchange for advertising?

A

Allowable

163
Q

Pre-trading expenditure more than seven years?

A

Disallowable

164
Q

Pre-trading expenditure seven years or less?

A

Allowable

165
Q

Decorating restaurant?

A

Allowable

166
Q

Decoratinmg apartment when apartment was in a usuable state when it was purchased?

A

Disallowable

167
Q

Cost of running a car used by an employee?

A

Allowable

168
Q

Cost of running a car by who’s doing the tax computation?

A

Private journeys disallowed

169
Q

Loan to employees written off?

A

Disallowable

170
Q

Impairment losses wholly and exclusively for business purposes?

A

Allowable

171
Q

Impairment loss for a trade debt?

A

Allowable

172
Q

Cost of initial repairs on a warehouse?

A

Disallowable

TX Accumulated Knowledge (35 decks)

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