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2016 Budget - Business Tax |
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Cash basis
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1.4.2016 |
1.4.2015 |
Entry threshold – turnover up to: |
£83,000 |
£82,000 |
Exit threshold – turnover not more than: |
166,000 |
164,000 |
Notes
- Unincorporated businesses with annual turnover within the above limits can choose to calculate taxable profits on the 'cash basis' – income received and expenditure paid,
- Deduction for loan interest is limited to £500 per year.
- Losses can only be carried forward.
- Certain businesses are not permitted to use the cash basis, including: farmers using the herd basis, persons using profit averaging, and LLPs.
Flat rate deductions
Item used for business |
Permitted deduction |
Taxpayer's car or goods vehicle |
Up to 10,000 miles pa |
45p/mile |
|
Over 10,000 miles pa |
25p/mile |
Taxpayer’s home (use per month) |
25 - 50 hours |
£10/month |
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51 - 100 hours |
£18/month |
|
101 hours or more |
£26/month |
Business premises partly used as home (e.g. public house or B&B) |
Private use adjustment |
|
1 occupant |
£350/month |
|
2 occupants |
£500/month |
|
3 occupants |
£650/month |
Notes
- Unincorporated businesses can choose the above fixed rate deductions to use instead of calculating the business proportion of actual expenditure.
- Use of home deduction covers power, internet, telephone, but not council tax or mortgage interest.
- Use of vehicle does not cover finance element of lease or hire purchase costs for vehicle.
- Use of business premises amounts are deducted from the actual expenses of running the building so that the personal costs of resident business owners are excluded.
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