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Hi Richard, sorry but I do not understand what your question is regarding trading profits – please explain.
hello Sir i want you to explain to me how you go about to treat this in adjusted trading profit it is said if a owner have vehicle and 20% of the vehicle is use for private purpose then the 80 % is allowable while the 20%disallowed here is a question i want to understand.
During the year 31 may jeremy the owner of a business drove a total of 12000 miles of which 9000 were for private journeys it was calculated as 9000/120000*4720 i was thinking that 20%should have been calculated but 75% was calculatedThen also if an employer provide an employee with a vehicle then the employee use 20% of this vehicle for his private movement it said the whole amount is allowable please exlpain
For expenses to be allowable in computing the adjusted trading profit they must be incurred wholly and exclusively for the purposes of the trade. Any private expenses of the trader himself/herself are not allowed and must be added back in the adjustment of trading profits.
Hence in the Jeremy example the private mileage is 9000 out of 12000 miles – that represents 75% of the total and therefore 75% of the travel expenses are disallowed.We only disallow private use by the proprietor, however, so we do not make adjustments for private use by employees – the reason being that if an employee is provided with the private use of a car then that is an assessable benefit to be assessed on the employee as per the car benefit rules in chapter 9 Employment Income.
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