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Self-employment from 1 February 2019
(1) Robinette’s trading profit for the first five-month period of trading from 1 February to 30 June 2019 was £55,700. This figure is before taking account of capital allowances.
(2) The only item of plant and machinery owned by Robinette, and used in this business, is office equipment which was purchased for £26,200 on 1 February 2019.
What would be the trading profit assessed in 18/19 tax year?
this was the answer given, but im just confused, wouldnt all of the trading profit be assessed less capital allowance as opening Year rules and then overlap profits to be claimed so it would be 29500?Answer:
Five-month period ended 30 June 2019 55,700
Capital allowances (26,200 x 100%) (26,200)
29,500
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Assessed in 2018–19 29,500 x 2/5 = 11,800The question has nothing to do with overlap profits – have you watched the lectures and worked through the Study Notes for chapter 6??
The tax adjusted trading profit for the opening 5 month period of trading is 29,500 – 2018/19 is the first tax year for which the basis of assessment is ACTUAL – therefore what is the profit from the start date to the following 5 April.
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