Chapter 4 – Tax Adjusted Trading Profit – Individuals – ACCA Taxation (TX-UK) lectures
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Example 1 – May I ask why the selling price of £650 is added back instead of the gross profit (£650 – £460)? Thanks
Because they didn’t accounted in there books (in cost of sales) so we have to add sale value for the answer.
Got most of this question right. Only the repair and renewal part is where I didn’t agree. In the Notes for that is says the building was in usable state so decoration of the shop would be seen as more of improvement, and therefor disallowed expense, than a repair which would have been allowed. Do you agree with this?
Where can i access the practice questions mentioned at the end of the chapter?
I do not see practise questions platform for TX paper. Please help. Tks!
did u find the practice questions mentioned at the end of each chapter? cuz i have the same question here
You need to download tax notes from the opentuition tax section. There you can find those practice questions.
in example 1 – Jeremy, part of the professional fees was Legal fees in connection with the purchase of the clothing shop (£1,200), this is a legal fee associated with the shop, it doesn’t say it’s a purchase of a NEW shop…so why is it not allowable?
As per my understanding of this, the reason why the legal fees associated with purchase of the shop was not tax deductible (disallowed) was because it was associated with a capital investment. Capital transactions are disallowed because they are assessed under capital gains and not trading income.
AS LEGAL FEES IN PURCHASE OF NEW SHOP IS CAPITAL EXPENDITURE NOT TRADING EXPENSE .
AS WE ARE ASKED TO COMPUTE TAX ADJUSTED TRADING PROFIT.
Kindly help to show working for this question.
Terry has been in business for many years preparing accounts to 5 April each year.
On 6 July 2022 leased a car with CO2 emissions of 125g. The leasing costs were £400 per month. In the period from 6 July 2022 to 5 April 2023, Terry drove 13,500 miles, of which 10,800 were on business.
What is the deductible expense for Terry in respect of the car for the year ended 5 April 2023?
(400*9) * (10800/13500) * 85% = £2448
What I don’t really understand is how do Jeremy and wife’s rent and utilities make it into the profit calculation in the first place? Do they not need to be included as expenses when they’re wholly and exclusively for business purposes meaning only 40% of the full amount? Thank you very much, very helpful videos. Zeynep
Thank you got some of it i definitely need to go through again