Lecture 4- Trading income- unincorporated business

Trading income- Anyone who is in or with such as accountants, lawyers, etc

Every , , or concern in of trade must be considered when looking at of trading income. These rules also apply to & such as accountants & lawyers

Badges of trade- Differences between someone who is or someone who is just & items

Distinguishing badges of trade is important in calculating for trading income. This is because due on trading income is much than on transactions which, if taxable, subject to capital gains tax

One principle that is applied in courts when deciding whether trading was occurring or not is so what is it that is being or

Another principle that is applied in courts when deciding whether trading was occurring or not is so how has person that item

Third principle that is applied in courts when deciding whether trading was occurring or not is so how does that person & those sorts of items

Fourth principle that is applied in courts when deciding whether trading was occurring or not is so have that person item between &

Fifth principle that is applied in courts when deciding whether trading was occurring or not is so why did that person that

Sixth principle that is applied in courts when deciding whether trading was occurring or not is so why did that person or that up for sale

In relation to calculating adjusted profit, is deductible & is non deductible

Allowable expenses include (if for ), & fees (including renewal for ), on short lease, for trade purposes, employees' , expenditure, expenses & for certain situation

Goods for own use- If there is own of trading stock & owner made no in accounts, should be adjusted by adding to profits less any made by owner. However, if were made to pay for those goods at cost, should be added to accounting profits

If there is non-trading income in accounts, you would have to & then as normal in owner's personal

Expenditure not in accounts, which is allowable is

Normal method of calculating accounting profits is using basis, & traders will use this. However, small businesses can instead opt to simply & take as their profit, less (). For this purposes small businesses are those with sales less than

Cash basis is way of calculating profit & would give for irrecoverable receivables because if money is never from sale, it never becomes . However, if business has been funded by , maximum that can be deducted is . Also, there is restriction to use of

For small businesses certain can be calculated by way of rather than keeping (simplified expenses) i.e. to & use of home for

Trading allowance- Businesses with of less than do not need to declare their . Businesses with of less than can just claim

Current year basis- Normal for taxation of profits. Therefore, you in any tax year for accounts ending at time during that year

Rather than sending returns to HMRC, from 2013-14 employers are required to send of PAYE for all employees to HMRC at time that employees are . Each time an employee is , employer must give of amount paid & deductions to HMRC, using , via “full payment submission”. If no payments are made, they still need to submit saying there has been no payments. These submissions must be done

Employer is required to deduct & from all employees, & amounts are deducted / from income to pay tax. To work out amount of tax to deduct, HMRC will issue to employer. This will take into account restricted if earning over £100,000, , such as professional subscriptions & if employee requests, HMRC can amend so that tax is also paid to take into account amounts of other to reduce amount of that an individual has to pay directly to

When PAYE was done manually, each employer used to get separate sets of . showed to date showed to date

One tax form that an is required to send all is . This details of , deducted & for full tax year. It is to be available to an employee by

Another tax form is . An is required to send this to an if they have got any (& ) for year – by

Third tax form is . It details of for employee leaving during . There are copies (one for & two which is given to to allow them to put correct on your remuneration for rest of that year

Need to inform of income requiring of tax return by following end of so that they can system to allow you to do that

Tax returns must be submitted by following end of tax year () & following end of tax year ()

HMRC can amend obvious ( or ) within months of its submission. Taxpayer can amend return within months of normal . Claims for “” can also be made within years of end of tax year to which relates

Normal payment date of personal tax is if you are an , you will have had deducted by your when they pay you

If you are or have got any other sources of & have to do & have some tax to pay directly to HMRC, you have to pay on account. First payment on account is in tax year. Second payment on account is following end of tax year. Balance is paid on following end of tax year