Private expenditure, goods for own use and illustration - "Chloe"
In this lesson, you'll learn how to identify and adjust private versus business expenditure when calculating tax adjusted trade profits—a critical skill for the Taxation paper.
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In this lesson
- 0:00 Private versus business expenditure
- 0:17 Disallowable personal expenses explained
- 0:58 Goods taken for own use adjustment
- 2:01 Chloe's jewellery business worked example
- 2:56 Cash basis versus accruals basis treatment
About this lesson
You'll discover why genuine business costs are allowable, how to handle mixed-purpose expenses like vehicles and phones, and why personal costs like drawings and private travel must be added back. The lesson covers goods taken for own use, showing you the different treatment under cash basis (add back cost) versus accruals basis (add back selling price), with a worked example using Chloe's jewellery business to demonstrate the full calculation of tax adjusted trade profit.
Duration: 3m
Transcript
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