Unit 18 Business Tax Help Needed!

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NickyW
NickyW Registered Posts: 97 Regular contributor ⭐
in AAT Level 4 (Level 8 in Scotland)
Hi there - I wonder if someone can help me?

Why is it when you calculate the adjusted trading profit before capital allowances you deduct rental income, interest receivable and profit on sale of fixed assets - then you add them all back on when you calculate the PCTCT figure?
Can anyone tell me the reason for this?
Many thanks
Nicky

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  • burg
    burg Registered, Moderator Posts: 1,441 mod
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    There are different schedules.

    Schedule D case i only deals with trading income. The rental income, interest receivable etc are not trading income so fall under different schedules. They need to be removed to find the taxable trading income but added back under the relevant schedules to find the total PCTCT
    Regards,

    Burg
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    Nicely put burg we did this today in college today and was explaned in the same way.

    The question i have why is it you use none trading interest under income but not trading interest when working out the PCTCT
  • NickyW
    NickyW Registered Posts: 97 Regular contributor ⭐
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    Burg -putting it like that it makes sense! Thanks Nicky
    A-Vic - I do not know the answer to that question as I can't get my head round that bit at the moment!!

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