Unincorporated Businesses Flashcards
Cash Basis
What Must be Accounted for as Income in the Period of Cessation?
The Value of Stock and Work in Progress.
Cash Basis
Sale Proceeds of a Fixed Asset Should be Included as Trading Income Where:
- The Asset Has Been Used in Business; and
- The Cost Has Been Included in the Accounts.
Cash Basis
Relief for a Business Car Can be Given Either as:
- A Flat Rate Expense; or
- Capital Allowances and Actual Running Costs.
Further Expenses
Pre-Trading Expenditure is Allowable Where:
- Incurred 7 Years Prior to Trading;
- Allowable Under Normal Circumstance.
Treated as Incurred on The First Day of Trading.
Trading Allowance
What is the Trading Allowance?
A £1,000 Tax-Free Allowance Available to Individuals Against Trading Income.
Other Than Those Carried on in Partnership
Trading Allowance
When is Trading Income Non-Reportable?
If an Individual’s Relevant Income is Below £1,000.
Other Than Those Carried on in Partnership
Flat Rate Expenses
The Flat Rate for Cars and Vans are:
- 45p Per Mile on the First 10,000 Business Miles; Then
- 25p Thereon
Flat Rate Expenses
The Flat Rate Motor Expense Does Not Cover:
- Incidental Expenses of Travel Such as Tolls and Parking Fees;
- The Interest Element of a Hire Purchase Agreement.
Flat Rate Expenses
Is a Flat Rate Motor Expense Claim Revocable?
No.
For as Long as the Vehicle Remains in the Business.
Capital Allowances on Cars
What Determines the Writing Down Value for a Car?
The Car’s CO2 Emissions.
Capital Allowances on Cars
First Year Allowances are Available on Cars That:
- Are Purchased Prior to 1 April 2025;
- Are New and Unused; and
- Have Zero CO2 Emissions.
Small Pool Balances
A Pool’s Balance Can be Written Down in Full Where:
- The Balance of the Pool Does Not Exceed £1,000; and
- It is Not a ‘Single Asset’ Pool.
Intended to Lessen the Admin Burden for Small Businesses.
Cessation of Business
What is the Impact of the Final Accounting Period on Capital Allowances?
- Balancing Adjustments Arise on Each Pool; and
- No WDAs or FYAs are Available.
Making a Claim for Capital Allowances
How and When Must Capital Allowances Claimed?
In a Self-Assessment Tax Return No Later Than the Deadline for Making an Amendment to a Return.
31 January 2027 for 2024/25
Disclaiming Capital Allowances
In What Situation Should a Trader Disclaim Some or All of the Capital Allowances Available to Them?
Where Accounts Produce Low Profits
Personal Allowance Covers Such Profits
Leads to Higher TWDVs Carried Forward, i.e., Higher CA Claims in Future Years.
