Chapter 4 - 2.1 - Private Expenditure of the Sole Trader

Question 1

What are the adjustments to profit rules an example of?

Answer 1

The rule of law as they have been established over the years through creation of legislation and through case law

Question 2

Expenditure may not be wholly and exclusively for trading purposes if:

Answer 2

• It is too remote from the purposes of the trade
• It has both a trade and non-trade purpose (the duality principle)

Question 3

What will HMRC do if there is a dual purpose for expenditure?

Answer 3

They will generally accept a reasonable apportionment between business use (allowable) and private use (disallowable)