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Hello, sir
Specimen Q3
Martin is self-employed, and for the year ended 5 April 2020 his trading profit was £109,400.
During the tax year 2019-20, Martin made a gift aid donation of £800 (gross) to a national charity.
What amount of personal allowance will Martin be entitled to for the tax year 2019-20?
Answer: £8,200 (12,500-(8600/2))
In my knowledge, a donation to a national charity is the disallowable expense but in this question, I had to deduct it not add back. How can it be?
Thank you in advance
Have you worked through the study notes and lectures for chapter 2? if the donation had been put through the statement of profit or loss then it would have already been added back in computing the adjusted trading profit of the business – what you show above is a totally separate issue of dealing with a reduction in the PA as the ANI of the taxpayer exceeds 100,000
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