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BUS 167 > Seminar 4: Self Employment Trading Income > Flashcards

Seminar 4: Self Employment Trading Income Flashcards

1
Q

Trade

A

any venture of in the nature of trade

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2
Q

What is used to indicate trade

A

badges of trade

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3
Q

10 badges of trade

A
  1. subject matter of transaction
  2. length of period of ownership
  3. frequency of transactions
  4. supplementary work
  5. reasons for sale
  6. profit motive
  7. method og acquisition
  8. way sale is carried out
  9. existence of similar transactions
  10. source of finance
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4
Q

What happens to disallowed expenses

A

added back

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5
Q

Trading allowance

A

£1000 per year

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6
Q

When trading receipt is less than £1000

A

exempt

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7
Q

When trading receipts are more than £1000

A

use:
- trading income - expenses
- trading income - £1000

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8
Q

When is expenditure deductible

A

when it is related to running of trade exclusively

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9
Q

Capital expenditure bringing enduring benefits to business, Allowed or disallowed?

A

disallowed

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10
Q

Legal or professional charged on acquiring NCA, Allowed or disallowed?

A

disallowed

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11
Q

Depreciation and amortisation, Allowed or disallowed?

A

disallowed

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12
Q

Repairs to new NCA if it puts the asset into usable condition, Allowed or disallowed

A

disallowed

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13
Q

Appropriations of profit, Allowed or disallowed

A

disallowed

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14
Q

Owners drawings or salary shown in expenses, Allowed or disallowed

A

disallowed

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15
Q

Personal tax and NIC, Allowed or disallowed

A

disallowed

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16
Q

Unreasonable payment of salary to family members, Allowed or disallowed

A

disallowed

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17
Q

Customer entertainment costs, Allowed or disallowed

A

disallowed

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18
Q

Staff entertaining costs, Allowed or disallowed

A

allowed

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19
Q

Gifts to employees, Allowed or disallowed

A

allowed

20
Q

Gifts to customers, Allowed or disallowed

A

disallowed unless it meets three specific requirements

21
Q

What are the three requirements for a customer gift to be allowed

A
  1. no more than £50 per customer
  2. are not food, drink or tobacco
  3. must display logo or form of advertisement
22
Q

Increases in general provisions for bad debts / stock, Allowed or disallowed

A

disallowed

23
Q

Specific provision, Allowed or disallowed

A

allowed

24
Q

Trade debts, Allowed or disallowed

A

allowed

25
Q

Non trade debts, Allowed or disallowed

A

disallowed

26
Q

Donations, Allowed or disallowed

A

disallowed

27
Q

Small donations to local charities, Allowed or disallowed

A

allowed

28
Q

Gift Aid donations, Allowed or disallowed

A

disallowed

29
Q

Gifts of stock or machinery, Allowed or disallowed

A

allowed

30
Q

Political donations, Allowed or disallowed

A

disallowed

31
Q

Subscriptions to trade professional bodies, Allowed or disallowed

A

allowed

32
Q

Fines and penalties, Allowed or disallowed

A

disallowed

33
Q

Parking fines incurred on business activity, Allowed or disallowed

A

allowed

34
Q

Fees relating to income, Allowed or disallowed

A

allowed

35
Q

Professional fees dealing with HMRC, Allowed or disallowed

A

disallowed

36
Q

Fees relating to capital expenditure, Allowed or disallowed

A

disallowed

37
Q

Legal costs of renewing short lease less than 50 years, Allowed or disallowed

A

allowed

38
Q

Costs of registering patents or copyright for trade, Allowable or disallowable

A

allowable

39
Q

Redundancy payments, Allowable or disallowable

A

allowable

40
Q

Educational courses, Allowable or disallowable

A

allowable

41
Q

Pension contributions paid by employers, Allowed or disallowed

A

allowed, not any accruals

42
Q

What is the disallowance for polluting cars

A

15%

43
Q

Interest payable, Allowable or disallowable

A

Allowable

44
Q

Non recoverable VAT, Allowable or disallowable

A

Allowable

45
Q

Patent royalties, Allowed or disallowed

A

allowed

46
Q

Pre trading expenditure, Allowed or disallowed

A

allowed if incurred in 7 years before starting trade

BUS 167 (4 decks)

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