In the example 1,
you have added back legal fees in connection with purchase of clothing shop but decorating the clothing shop 2,200 not added back. since this is an improvement to the asset we have to added it back. please correct me if I am wrong.
A
Anonymous·
The question also specifies that the building was in a usable state when it was purchased. Therefore, the decorating was neither required to get the asset (shop) up and running nor was it an improvement because it didn't improve the ability of the asset (shop) to do what it was meant to.
In other words, the decoration was merely to make the shop look nicer- not actually contributing to the revenue generating capability of the shop. Therfore, it is not classed as capital expenditure and is allowable as a revenue expense in the tax adjusted trading profits. So it does not need to be added back because we are allowed to include it as a revenue expense.
R
Rushita·
Why did we add the food hampers for customers in Example 1 but excluded it in MCQ1?
N
Natalia·
The food hampers were added back in both Example 1 and MCQ1. Because it is food it is not allowable as per 2.2 (d)
J
Junaidudhin·
In the example 1 (Jeremy's Tax Adjusted Trading Profits, can you confirm where is the purchase of new shop of 1,200 considered from?
N
Natalia·
Under Note 3 Professional Fees.
A
Andrii·
this section was overloaded but anyways thank you
G
Gold·
I am actually studying for Advanced taxation in the September diet exam and realize there's only TX available on OpenTuition.
Can I still use the lectures and study notes to study for the exam even though it's not ATX?
D
David·
In the last example, why is it fine that 3 employee's get a Christmas party of £630? I thought the allowance is £150 per head?
A
Awais·
The notes (pg. 45) and these video lectures doesn't mention any limit on entertaining the employees.
N
Natalia·
The Christmas party for staff is not added back because entertaining employees is allowable as per 2.2 (d)
B
Benhur·
In example 1,why did we add back the legal fees for the purchase of the clothing shop?
Z
Zamanguni·
because the legal fees are related to a capital item
A
Agala·
When solving for Giles why did we include bank interest as an expense? I thought it was a non allowable expense and the relief is only given as 20% taken of the tax..
you have added back legal fees in connection with purchase of clothing shop but decorating the clothing shop 2,200 not added back. since this is an improvement to the asset we have to added it back. please correct me if I am wrong.
In other words, the decoration was merely to make the shop look nicer- not actually contributing to the revenue generating capability of the shop. Therfore, it is not classed as capital expenditure and is allowable as a revenue expense in the tax adjusted trading profits. So it does not need to be added back because we are allowed to include it as a revenue expense.
Can I still use the lectures and study notes to study for the exam even though it's not ATX?