ApplyBadgesofDeemtobe

CAPITALGAIN TheTheBadgesofSubjectmatter:typeusuallyFrequencyoftransactions:morefrequentindicatesLengthofownership:shortperiodofownershipindicatesProfitmotive:indicatesSupplementaryworkandmarketing:indicatesMannerinwhichassetswereacquired:ifunintentional,eginheritance,whensoldlaterunlikelytobetrade.Proforma&Non-savingsSavingsincome Propertybusiness

Less:qualifyingInterest NetIncome Less:personalallowance ProformaProforma&

netaddback capitalnetbasictradinglossProformaProforma&￡Addexpenditurenotdeductiblefortax(egXanynon-tradingXDeduct:itemsnottaxedastradingAdjustedXLess:CapitalXNon-savingsSavingsincome Propertybusiness

Less:qualifyingInterest NetIncome Less:personalallowance ProformaProforma&+Qualifyingloaninterestpaymentsarenotallowableastheyaredealtwithasadeductionfromtotalincome.+Patentroyaltiespayableareanallowablededuction adjustedtradingIrrecoverable

-Tradedebtwriteoffs&allowance -Nontradewriteoffsarenot EntertainingEntertainingand entertainingisdisallowed,unlessentertaininggiftstoemployeesareallowablegiftstocustomersareonlyallowable theycostlessthan￡50perpersonperyear,thegiftisnotfood,drink,tobaccoorvouchersexchangeableforgoodsandservicesthegiftcarriesaconspicuousadvertisementfortheSubscriptionsand tradeorprofessionalassociationlocalcharity&tradepurposeNot GiftAidPoliticalnationalLegalandprofessionalAllowablelegal Legalfeestocollecttrade Legalfeestoobtainloanfinancefortrading Legalfeesofregistering Legalfeesofrenewingashort Legalfeesinconnectionwiththedefenseofthecompany’sinternetdomainname Legalfeesinconnectionwithcourtactionsagainstsuppliers/customersforbreachofcontract. AccountancyandauditLegalandprofessionalNotallowablelegal Legalfeesarisingasaresultofissuingnewshare Legalfeesinconnectionwithcourtactionsfornotcomplyingwithcertainlawandlegislations. LegalfeesoftheinitialgrantingofashortProformaProforma&Interest LeaserentalsoncarswithCO2emissions thedisallowedamountis15%oftheleasingchargesProformaProforma&Finesandincurredbyemployeefor incurredby PrivatelyusedanEmployer:addbackprivate -Employee:no Employee:no Anysalarypaidtothefamily:addback part(commercialEmployerremovesgoods:addbackprofit(costin bookor7yrsPre-tradingexpenditure–treatedasanexpenseincurredonthedaythebusinessstartstrading(e.g.pre- tradingadvertisingexpenditure)HereisthestatementofprofitorlossofJohn,aStatementofprofitorlossforyearended31May￡￡GrossOtherBankinterestWagesandsalariesRentandMotorexpenses–carsownedbybusinessMotorexpenses–costofleasedcarCO2emissions130g/kmEntertainmentexpenses–FinanceInterestpayableon Net Salariesinclude￡10,000paidtoJohn'swife,Julie,whoworksparttimeinthebusiness.IfJohnhademployedanotherpersontodothiswork,Johnwouldhavehadtopayatleastthisamount.Motorexpensesoncarsownedbythebusiness￡3,000forJohn'scarused20%privatelyand￡2,000forhispart-timesalesman'scarused40%privately.Theleaseofthecarstartedon1May2021Noprivateuseontheleasedcar.Computetheadjustedtaxabletradeprofitfortheyear31May2021.Youshouldstartwiththenetprofitfigure￡10,400andindicatebytheuseofzero(0)anyitemswhichdonotrequireadjustment.CashbasisforsmallbusinessCashbasisforsmallCertainsmallunincorporatedbusinesses(soletradersandpartnerships)mayelecttouseacashbasistodeterminetheirtaxadjustedtradingprofitsinsteadofthenormalaccrualsbasis.Therevenuelimitforusingtheschemeasbeenincreased￡150,000.TheschemecanthenbeuseduntilrevenueCashbasisforsmallThecashbasiswillassessabusinessonitscashreceiptslesscashpaymentsofallowablebusinessexpenses.Payables,receivablesandinventoryareignored. receiptswillbetaxableCertaincapitalexpendituresarenotdeductible:costofmotorcars,landandbuildingsCashbasisforsmallAfixed(flat)ratedeductionwillbeappliedforAnallowanceforbusinessmileagecanbeclaimedatarateof45ppermileforthefirst10,000businessmilesand25pthereafterComputationComputation￡Receipts(inc.saleofplant& Expensepayments(inc.purchaseofplant&machinery) Taxadjustedtradingprofit/(loss) Roseisasoletraderwhopreparesaccountsto5Aprileachyearusingthecashbasisofaccounting.Herresultsfortheperiodofaccountto5April2021showthefollowing:￡Cash Cash Thefigureforinvoicesalesincludesaninvoicefor￡1,500whichwaspaidon10April2021.Inadditiontothecashexpensesof￡20,200(notincludingthemotoringexpenses),Roseincurredmotoringexpenses￡2,800fordriving8,000milesofwhich6,500mileswereforbusinesspurposes.Rosewishestousetheflatrateallowanceformotoring.WhatisRose’staxabletradingincomeforthetaxyearAfterclassBayleisself-employedasalawyer.SheisalsoadirectorofAcquit&AppealLtd.Thefollowinginformationisavailableforthetaxyear2020/21:(1)Bayle’sstatementofprofitorlossfortheyearended30September2020isasfollows:￡￡2Giftsand3Leaseofmotor4Professional5Property6Travel Other Net (2)Revenueincludes￡2,800receivedduring2020inrespectofanimpairmentlossthatBaylewrittenoffwhencalculatinghertradingprofitforyearended30September(3)GiftsanddonationsareasGiftstocustomers(clockscosting￡110each￡Giftstocustomers(bottlesofchampagne￡40eachanddisplayingBayle’sDonationstopoliticalTheleasecommencedon1May2020,andisinrespectofamotorcarwithCO2emissionsof144gramsperkilometre.Thereisnoprivateuseofthemotorcar.Thefigureof￡3,240forprofessionalfeesisinrespectofaccountancyservices,ofwhich￡600isforinheritancetaxplanningadvice.Baylelivesinanapartmentthatissituatedaboveheroffice,andtwo-fifthsofthetotalpropertyexpensesof￡46,240relatetothisapartment.Thefigureof￡16,770fortravelexpensesincludes￡52