Business Profits & Add-Back Questions Flashcards
what are the badges of trade
subject matter
period of ownership
# of transactions
supplementary work
circumstances for realisation
motive
what is considered a short lived business
commences and ceases within 3 years
what are the 2 cases for losses
1.self employed = use loss to reduce total income
- carry loss forward to next year to reduce profits from trading income (used as tax credit)
are personal expenses an allowabel expense
no- add back
is capital expenditure an allowable expense
no - add back
is depreciation an allowable expense
no - add back
is loss on disposal an allowable expense
no - add back
is profit on disposal an allowable expense
no - deduct from total
are legal fees when buying capital an allowable expense
no - add back
is interest paid on loans for capital expenditure an allowable expense
yes
examples of disallowable expenses by legislation
- parking fines
- charitable donations
- interest on late tax payments
- client entertainment
- motor leasing
-capital expenditure - interest on late tax payments
- patent royalties
is staff entertainment and holidays an allowable expense
yes
what is done with increases in bad debt provisions
added back
what is done with decreases in bad debt provisions
deducted
is interest payment on loan to fund working capital an allowable expense
yes
is maintenance expenses such as painting and plumbing for the business an allowable expense
yes
category A and B motor vehicle figure
€24000
category c and d motor vehicle figure
€12000
is general provision allowable expenditure
no
is cost of entertaining staff incidental to entertaining others an allowable expenditure
eg worker brings client to lunch
not allowed as deduction
are bad debts written off an allowable expenditure
yes
are bad debts recovered allowable
no -deduct
