Commentary

B5.136 Trading stock basis

Business tax
Business tax | Commentary

B5.136 Trading stock basis

Business tax | Commentary

B5.136 Trading stock basis

It is convenient to summarise the effect of the trading stock basis as follows—

ItemTreatment
Stock at beginning of yearDeduction in computing profit
Cost of animals boughtDeduction in computing profit
Price of animals soldAddition in computing profit
Stock at end of yearAddition in computing profit

Officers of HMRC sometimes require a numerical reconciliation of animals at the beginning and end of the period, as a test of the accuracy of the accounts. Births and deaths naturally fall to be shown, and these often account for what may seem discrepancies in the eyes of the officer.

Identifying what

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