profit on disposal

This topic has 2 replies, 3 voices, and was last updated 5 years ago by Tax Tutor.

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May 1, 2020 at 4:10 pm #569707
jean989
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Dear sir,
do we add back or deduct profit on disposal to get tax adjusted trading profit
May 2, 2020 at 3:58 am #569746
Noah098
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Both profit and loss arising on disposal of an asset are not allowable gains and allowable expenses(due to subjectivity involved in calculating them), respectively as per the guidelines of HMRC. So, if we had shown(added) a profit on disposal in our P&L, then we will deduct it. And similarly if we had deducted a loss(and shown it as an expense) we will add it back to tax adjusted trading profits.
Correct me sir, if am wrong.
May 2, 2020 at 10:59 am #569782
Tax Tutor
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As Noah has stated the profit on a disposal of an asset is not a trading profit and therefore if included within the accounting profit needs to be deducted in the adjustment of profits exercise
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