Backdating capital allowances
The cost of these leaflets will be treated as a separate deduction from his profits in the first accounting period.This is because such advertising costs would normally be deducted from his trading profits had he paid for them after he started trading and they were incurred within seven years of trade commencing.However, big changes to the capital allowances rules are coming soon.These will affect all business owners and many property investors.But in these days of flexible working and "hot desking" - where there are more employees in an enterprise than there is office space to accommodate them - and performance-driven rewards, where projects must be finished in the evening or at weekends in order to meet a deadline, employees are increasingly required to work outside the office.
Pre trade expenses, as with other expenses, can either be normal expenses that are deductible when working out your profit or capital expenditure that is given tax relief through capital allowances.In some cases, losses from them can be set against taxable income, instead of gains Negligible value claims can be useful in reducing an individual’s tax liability if they own assets that have become worthless since their acquisition. Companies may also make negligible value claims on chargeable assets but this article deals solely with the personal tax aspects of such claims.When a taxpayer makes a negligible value claim, they are treated as if they had sold the asset and immediately reacquired it for its value at the time the claim is made.Most people are aware that the self-employed can enjoy generous tax allowances to offset the costs associated with running a business - travel to see clients, office premises, stationery, repairs to office machinery, purchase of equipment such as PCs and fax machines and so on.
If they work from home, they may also be able to offset a proportion of heating and lighting expenses.
Most people in the UK get a Personal Allowance of tax-free income.