Trading Income Flashcards
Disallowable or Allowable expenditure: Capital Expenditure?
Disallow - Add back
-Distinguish between repairs (Allowable) and improvements (Disallow)
Disallowable or Allowable expenditure: Depreciation?
Disallow - Add back
Disallowable or Allowable expenditure: Appropriation of profit?
- Owner’s salary
- Drawing
- Unreasonable payment to family members
- Private element of expenditure
Disallow - Add back
Disallowable or Allowable expenditure: Movements in general provisions?
Disallow - Add back
Disallowable or Allowable expenditure: Write off of non-trade debts?
Disallow - Add back
Disallowable or Allowable expenditure: Client entertaining?
Disallow - Add back
Disallowable or Allowable expenditure: Gifts?
Disallow - Add back
EXCEPT:
- Gifts to employees
- Gifts of trade samples
- Gifts to customers if they advertise business and not food/drink/tobacco/Vouchers < £50
Disallowable or Allowable expenditure: Donations to charities or political parties?
Disallow - Add back
EXCEPT small donations to local charities which are allowable
Disallowable or Allowable expenditure: Legal fees of a capital nature?
Disallow - Add back
EXCEPT:
- Fees and other costs of obtaining long-term debt financing
- Costs of registering patients
- Costs of renewing a short lease (Not the initial grant or acquisition)
Disallowable or Allowable expenditure: Employment payments?
Wages and salaries generally allowable unless not paid within 9 months of accounting period
Disallowable or Allowable expenditure: Leased Cars?
If the leased car has CO2 emissions:
1) > 110 g/km DISALLOW
- 15% * Hire Charge
2) < 110 g/km Allow
Disallowable or Allowable expenditure: Interest on late payment of tax
Disallow - Add back
Disallowable or Allowable expenditure: Employee pension contributions?
Allow on PAID basis
Accrual basis not allowed
Disallowable or Allowable expenditure: debt collection?
Allow
Disallowable or Allowable expenditure: taking good for own use?
Disallow - Add back at selling price
