Chi commenced self-employment on 6 April 2023, and for the year ended 5 April 2024 her trading profit using the normal accruals basis was £53,000, calculated as follows:
Revenue - £72500
Expenses:
- Motor expenses – (£4400)
- Other expenses – (£8200)
- Capital allowances – (£6900)
Trading profit - £53000
Notes –
a) Revenue –
The revenue figure of £72,500 includes receivables of £1,600 which were owed as at 5 April 2024.
b) Motor Expenses –
The total motor expenses for the year ended 5 April 2024 were £5,500, of which 20% was for private journeys. This proportion has been disallowed in calculating the trading profit. During the year ended 5 April 2024, Chi drove 13,200 business miles.
c) Other expenses –
The other expenses figure of £8,200 includes payables of £900 owed as at 5 April 2024.
d) Capital allowances –
Capital allowances consist of an annual investment allowance claim of £4,020 in respect of office equipment purchased on 6 April 2023, and a writing down allowance of £2,880 claimed in respect of Chi's car. The car had cost £20,000 on 6 April 2023.
Q. Based on the trading profit of £53,000 for the year ended 5 April 2024, what is Chi's income tax liability for the tax year 2023/24?