Btc - Please Help!

becs129

I am struggling a little with the order in which to set out the basic computation. This is what I think is correct. Could someone please clarify?!

Net Profits (as per accounts)
add dis-allowed expenses
depreciation etc
gift aid
less dis-allowed income:
Profit on sale of asset (e.g. shares)
rental income
interest received
=adjusted trading profit


Adjusted trading profit
less gift aid
less CA
less IBA's
add rental income
add interest
add capital gains
= PCTCT

Is this format correct?

I've got a feeling I've got the rental income and interest bit completely mixed up!

HELP!

cs_1988

Looks fine!

Thelma

Btc - please help

I would slightly re-order as you deduct capital allowances first to get the tax adjusted trading profit (schedule D case I):

Net Profits (as per accounts)
add dis-allowed expenses
depreciation etc
gift aid

less dis-allowed income:
profit on sale of asset (e.g. shares)
rental income
interest received
=adjusted trading profit

Adjusted trading profit
less CA
less IBA's
= tax adjusted trading profits

Tax adjusted trading profits
add interest
add rental income
add capital gains / loss
less gift aid
= PCTCT

cs_1988

Hi Thelma,

Can you give me a lowdown of the Schedules, i have never seen them in my textbook.

I know the are schedules D A etc,

but have no idea what they mean!!

Thanks in advance
Chris

Thelma

Hi Chris, here they go:
Schedule D Case I = adjusted trading profits (after capital allowances)
Schedule D Case III = interest income
Schedule A = rental income
All the above plus chargeable gains add up to total profits before charges on income (Gift Aid).
Hope it makes sense.

cs_1988

yes thanks!

becs129

Thelma wrote: »

I would slightly re-order as you deduct capital allowances first to get the tax adjusted trading profit (schedule D case I):

Net Profits (as per accounts)
add dis-allowed expenses
depreciation etc
gift aid

less dis-allowed income:
profit on sale of asset (e.g. shares)
rental income
interest received
=adjusted trading profit

Adjusted trading profit
less CA
less IBA's
= tax adjusted trading profits

Tax adjusted trading profits
add interest
add rental income
add capital gains / loss
less gift aid
= PCTCT

So just to clarify, you take the rental income and interest out at one stage, then just add it back in again at the next stage... giving no overall efect to the amount liable to tax?

richards0l0

Yes you take rental income and non trade interest rec from the net profit to get the adjusted trading profits. You then need to add it back when working out the PCTCT

becs129

thank you! That was really baffling me!