Btc - Please Help!

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becs129
becs129 Registered Posts: 17 New contributor ๐Ÿธ
in AAT Level 4 (Level 8 in Scotland)
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!

Comments

  • cs_1988
    cs_1988 Registered Posts: 231 Dedicated contributor ๐Ÿฆ‰
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    Looks fine!
  • Thelma
    Thelma Registered Posts: 3 New contributor ๐Ÿธ
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    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
    cs_1988 Registered Posts: 231 Dedicated contributor ๐Ÿฆ‰
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    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
    Thelma Registered Posts: 3 New contributor ๐Ÿธ
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    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
    cs_1988 Registered Posts: 231 Dedicated contributor ๐Ÿฆ‰
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    yes thanks!
  • becs129
    becs129 Registered Posts: 17 New contributor ๐Ÿธ
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    Thelma wrote: ยป
    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
    richards0l0 Registered Posts: 13 New contributor ๐Ÿธ
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    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
    becs129 Registered Posts: 17 New contributor ๐Ÿธ
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    thank you! That was really baffling me!

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