trading income Flashcards
is capital expenditure allowable?
not allowable for calculating taxable trading profit, but may be allowed for CGT
is depreciation allowable?
no
is loss on sale of fixed assets allowable?
no
is cost of capital assets allowable?
no
are costs of improvements/enhancements allowable?
no
is capital expenditure included within legal and professional fees allowable?
no
are repair and maintenance allowable?
yes
are repairs and maintenance allowable using more current materials e.g. single to double glazing?
yes
are trade/professional association subscriptions allowable?
yes
are donations allowable?
yes if it’s a small donation to a local charity
yes if it’s gifts of stock/assets to local charities and schools
no if it’s to national charities
no if it’s to political parties
is a gift of trade samples to customers allowable?
yes
are gifts to customers allowable?
no, unless:
cost <£50 per recipient per year
not food, drink, tobacco, vouchers exchangeable for goods
carries an advertisement for the business
are gifts to employees allowable?
yes
what is the limit for allowable gifts to employees?
none
are legal and professional fees allowable?
yes, if they are incurred for the purposes of the trade, for example legal fees chasing debts and charges incurred in defending the title to fixed assets
are fees / costs of obtaining long term debt finance allowable?
yes
is the cost of registering patents allowable?
yes
is the expense of renewing a short lease allowable?
yes, but the legal expenses incurred on the initial granting of the lease are not
are the costs of hiring plant and equipment allowable?
yes, unless car ….. 15% disallowable with CO2 emissions above 50g/km
are fines allowable?
no, unless it’s incurred by an employee whilst on work business
is irrecoverable VAT allowable?
yes, if it relates to allowable expenditure
is interest on late paid tax allowable?
no
is interest on borrowings for the purpose of the trade allowable?
yes
how much is the trading allowance and when is it used?
£1,000
used when allowable expenses < £1000, then the trading allowance can be deducted instead of the expenses
