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ACCA Taxation (TX-UK) Trading Profit part 5

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  2. what wasn’t the capital allowance of car in normal basis counts like 8000+12000*60%*8%?
    The car emissions is 122 which is special rate pool isn’t it?(since 122>110)

  3. Can you please let me know if cars purchased by the business and used by employees (not the owners) can qualify for mileage allowance or should the business treat them as capital allowances?

  4. Rent should be included in the private rate adjustment, am I wrong?

    “The flat rate amount reflects the non-business proportion of expenditure on household goods and services, rent, utilities, food and non-alcoholic drinks.”

      • sorry, i dont understand what you mean…please can you explain…

        Also the motor car purchase has CO2 emission of 122g so i felt it should be under special rate pool..and so should attract 8%*60%

        what do you think?

  6. Good afternoon,

    In Example 7 I don’t see why we take the full 12 months when we are calculating the Capital Allowances. If the Adam started trading on June 1, 2017 and prepares accounts in May 31, 2018, shouldn’t we only take into consideration for our calculations a period of 10 months?

    Thanks in advance.

    • Capital Allowances are deducted from profits before the Opening Year Rules are applied. In other words when using opening year rules Tax Adjusted trading profit is used.

      Capital Allowances are calculated for a period of account (in this case exactly 12 months)

      However in calculating capital allowances for an “accounting period” longer or shorter than 12 months (which might be the case when you start a new trade) then the AIA and WDA are scaled up or down as appropriate

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