Typical Expenditure by a Business (1)

Question 1

What is the general rule of expenditure?

Answer 1

Expenditure not wholly and exclusively for the purpose of trade is not allowable

Question 2

Capital expenditure?

Answer 2

It is not allowable. This includes depreciation

Question 3

Repair of an asset?

Answer 3

Is revenue expenditure and is allowable

Question 4

Improvement of an asset?

Answer 4

Is capital expenditure and is not allowable

Question 5

Relief, such as qualifying loan interest payments?

Answer 5

Not allowable as it is a deduction from total income

Question 6

Irrecoverable/impaired debts?

Answer 6

Allowable, tax treatment follows accounting treatment

Question 7

Non-trade write offs?

Answer 7

Not allowable, so expense is added back

Question 8

Entertaining?

Answer 8

Disallowed, unless entertaining employees

Question 9

Gifts to employees?

Answer 9

Allowable