FOUR ELMS BOOKKEEPING
Bookkeeper for small businesses in Yeovil, Sherborne, Langport, Somerton, Wincanton and surrounding areas of South Somerset and West Dorset.
Expenses disallowed when calculating trading profits for income tax
EXPENSES MUST BE WHOLLY AND NECESSARILY INCURRED FOR TRADE PURPOSES TO BE TAX-DEDUCTIBLE
- Any depreciation on fixed assets such as vehicles, buildings, equipment etc.
- Improvements to capital assets such as buildings (however repairs are allowable)
- Entertaining customers (entertaining employees is allowed)
- Gifts to customers are disallowed unless
Charitable donations via GiftAid (the charity recovers basic rate tax on these - if you are a higher rate taxpayer
then tax band limits are extended and a tax refund may be due)
Donations to national charities not made via GiftAid.(gifts to local charities as part of business promotion are allowed)
Donations to political parties
Legal fees relating to capital items owned by the business (except for fees incurred obtaining loan finance)
Premiums paid for grants of leases.
Fines and penalties (except for reimbursement of those incurred by an employee while on duty)
Private use by the business owner of assets owned by the business e.g. use of property as
domestic accommodation or private use of cars (however, use by an employee is allowable and
will incur a taxable benefit in kind for the employee)
Drawings by the owner, including drawings described as interest on capital invested.
Goods removed by the owner for personal use must be accounted as sales at full selling price
Any salary paid to members of the owner's family which exceed normal market rates.
- they cost less than £50
- the gift is not food, drink or tobacco
- the gift carries an advertisement for the business