The following Tax Q&A provides comprehensive and up to date legal information covering:
In answering this Q&A, we have assumed that the person in question is a UK resident and domiciled person carrying on a sole trade (ie not in partnership) wholly within the UK. We have also assumed that the person in question is not using the cash basis.
There are two fundamental questions to answer when considering whether an expense is deductible in calculating the profits of a person’s trade:
is the expenditure capital in nature, and
assuming it is not capital, has the expenditure been incurred wholly and exclusively for the purposes of the trade
These requirements are
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