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Hello,
Eu trading profit for the the year end 30 June 2019 is £62,775 and capital allowance for the year to 30 June 2019 is £1,575.
What is Eu’s Trading income assessment for the tax year 2019/20?
1. The answer is £61,200(62,775-1575)
2. Could you explain why CA has been deducted.
-Theoretically if the CA has been deducted, the there should have been depreciation which needs to be added back.
-Please clarify this point.Regards,
AdarshIt is very worrying that you should ask such a basic question if you have worked through the OT Notes with the lectures.
Depreciation is added back in the adjustment of the trading profit and capital allowances are ALWAYS deducted from the adjusted trading profit to establish the tax adjusted trading profit, which is then assessed.
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