SCENARIO: Apex Consulting LLP is a management consulting firm. The partnership prepares accounts to 31 December each year. On 1 July 2023, a new partner, Beatrice, joined the partnership. Her share of the partnership profits for the year ended 31 December 2023 was £48,000. Prior to joining, Beatrice incurred £2,000 of training costs relevant to her new role. The partnership is considering changing its accounting date to 31 March.
QUESTION: What is Beatrice's basis period for her first tax year (2023/24)?
ACCA · Question 30 · Income tax and national insurance contributions
SCENARIO: Apex Consulting LLP is a management consulting firm. The partnership prepares accounts to 31 December each year. On 1 July 2023, a new partner, Beatrice, joined the partnership. Her share of the partnership profits for the year ended 31 December 2023 was £48,000. Prior to joining, Beatrice incurred £2,000 of training costs relevant to her new role. The partnership is considering changing its accounting date to 31 March.
QUESTION: How are Beatrice's £2,000 pre-trading training costs treated for tax purposes?
Answer options:
They are ignored as they were incurred before the trade commenced
Treated as incurred on the first day of trading (1 July 2023) and deductible if wholly and exclusively for the trade
Capitalized and amortized over 5 years
Deducted from her personal allowance
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