Module 1 class notes

Question 1

Personal allowance amount for new tax year 6 April 21 to 5 April 22?

Answer 1

12570

Question 2

New BRB for new tax year?

Answer 2

37700

Question 3

What are the badges of trade? (Hint: think SOFIRM)

Answer 3

S subject matter
O length of ownership
F frequency of transactions
I improvement
R reason for sale / acq
M profit motive

Question 4

If the goods sold from a trader turn out to classify as trading income, what tax will this be subject to?

Answer 4

income tax

Question 5

if the goods from a trader turn out to classify as a capital sale, what tax will this be subject to?

Answer 5

capital gains tax

Question 6

Allowable expenditure are both ____ and ___ of trade?

Answer 6

wholly and exclusive

Question 7

is staff entertaining and gifts wholly allowable or disallowable, in relation to trading profits?

Answer 7

allowable in full

Question 8

is client entertaining allowable or disallowable?

Answer 8

client entertaining is disallowable, therefore cannot be deducted in tax adjusted trading profit

Question 9

client gifts are disallowable, UNLESS…? (3)

Answer 9

1. less than £50 each, per annum;
2. bears logo or name;
3. is not food, drink, vouchers

Question 10

what is considered a ‘high emission’ car in terms of CO2 g/km ?

Answer 10

> 50 g/km

Question 11

what is the treatment (allowable or disallowable) of a leased car, and does the treatment depend on the emissions?

Answer 11

this is only for LEASED cars only

if co2 emissions are < 50g/km, fully allowable

if co2 emissions are > 50 g/km, 15% disallowed

Question 12

If the car was leased before 6 april 2021, restriction applies on cars > ___ g/km, rather than > 50g/km

Answer 12

110 g/km