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  1. avatar says

    Hi could someone please help. Q9 of chapter 6 – trading profit basis periods.

    In the answer the trading profit is £54,153, should it not be 54,153 + 13,538 = £67,691?
    2012/13 (actual) (1.1.13 – 5.4.13) 3/12*54153 =. 13,538
    2013/14 cyb a/c 54,153.
    I would really appreciate it if someone could help explain why are we not taxing the 67,691?
    Thank you opentuition for the great lectures.

  2. avatar says

    HI i was wondering if you could explain to me how the Trading profits is calculated in the following question. I was able to calculate the correct capital allowance figure but after that i got stuck. I hope to hear from you soon and thank you in advance.

    Grace starts a trade on 1 February 2013, and has the following results (before capital allowances).
    Period of account Profit
    £
    1 February 2013 – 31 July 2014 105,000
    1 August 2014 – 31 July 2015 79,270
    1 August 2015 – 31 July 2016 70,730
    Plant is bought as follows:
    Date Cost
    £
    1 February 2013 Plant 69,500
    1 Dec 2013 Car (115g /km) 18,000
    1 Oct 2014 Machinery 40,000
    1 Feb 2016 Plant 25,000
    On 1 May 2016, the car purchased on 1 December 2013 was sold for £10,000.
    Calculate the trading profit assessments for the first five tax years assuming maximum capital allowances are claimed.
    Assume that the capital allowance rates applicable to the 13/14 tax year apply throughout.

    I am able to work out the capital allowances to equal :

    1/2/2013 – 31/7/2014 £74360
    1/8/2014 – 31/7/2015 £42365
    1/8/2015 – 31/7/2016 £25775

    But how do i work out the correct trading profits ?

  3. avatar says

    I am getting a different figure also – Total Profit (W1) – 53,818. I base this on Adjusted profit (89,000) minus Capital Allowances (W2) of 35,182.

    Total Income 53,818
    PA (9,440)
    Taxable Income 44,378

    32,010 x 20% = 6,402
    12,368 x 40% = 4,947
    44,378 = 11,349

    2012/13 – Actual = 3/12 of 53,818 =13,455
    2013/14 CYB = 53,818

    Overlap Profits of 13,455

    If I’m wrong, I’m wrong, but that is what I get.

    What does everybody else’s figures show?.

  4. Profile photo of Tax Tutor says

    Hi everyone – have now just seen your comments regarding example 9 in chapter 6 and have checked the errata sheet but you are right this error has not yet been posted which I thought it had been – I will amend the errata sheet today therefore! If you look at the F6 Ask the Tutor forum you will see my answer to this query when raised by “futurediva” about 2 weeks ago. Hope that this will resolve problem. I have not listened back to the lecture regarding the CO2 low emission level but 110g/km was the figure for last year so if I have said this in error during the lecture then again my apology as the correct figure for this year is of course 95g/km! If you find any other errors in the material please do let me know so that again we may continue to improve the material that you use – thank you and good luck in your exams!

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