Business Taxation: Trading Profits, Self-Employment, and Trade Badges

UGB 225 Business Taxation
Alternative Assessment 2020/21

Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1..................................................................................................................................3
Linda's trading profits for the year 31st march 2121:...................................................................3
QUESTION 2..................................................................................................................................4
Criteria for the use for employment for self employment, why people prefer self employment:
.....................................................................................................................................................4
Why prefer self-employment rather than being employed, resulting in so many IR 35 cases:...6
QUESTION 3..................................................................................................................................7
Discussion Six badges for trade:..................................................................................................7
Different VAT schemes for the various VAT registered companies:.........................................9
QUESTION 4................................................................................................................................11
Inheritance tax arising when the death:.....................................................................................11
Capital gain tax liability:...........................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business taxation corresponds to taxes which organizations are required to pay as
component of their regular business activities. If there is a single owner, a partner, limited
liability partnership or an organisation, every organization is accountable for compliance
with tax regulations. The study-report covers various aspects of business taxation (Blakeley,
2018). This report covers topics such as trading profits, six trade badges, different VAT schemes
for different VAT registered entities, etc. Besides this, it covers practical sum on inheritance tax
and capital benefit tax obligation.
QUESTION 1
Linda's trading profits for the year 31st march 2121:
In business, trading profit is equal to the overall profits gained of its operations. It does
not require the funding of associated profits, the cost of earnings for the properties. It aims to
have a higher predictor of the potential of firms to conduct key market operations in attempt to
improve their performance. The benefit that the purchaser produces for the acquisition, the
selling of securities. The trade returns are large for a customer who understands the risks
involved in business transactions. These gains are made from buying, selling for items, services.
This statement depicts not allowable trades with firms that display income from trade. Trading
gains are income-generating profits for the company, costs which are not allowed for the
enterprise. These benefits which enable companies to make profits through their operations,
which enable businesses to achieve their targets (d’Andria, Pontikakis and Skonieczna, 2018).
There are different concepts of accounting that allow administrators to make financial
decisions. Accounting department reports transactions that enable company to meet its goals.
The Accounting Team produces a number of financial reports to help them maintain track. These
documents allow them to make financial arrangements, manage finances for commercial
operations to meet goals.
Linda’s trading profit (before deduction of capital allowances) for year ended 31 Mar 2021
Particulars/details £ Amounts
Net profits per accounts 6,96 0

Add: Expenditure which shows in the income
account but not allowable
Depreciation 2,500
Installation of new improved heating system 3,800
Telephone costs 220
motor expenses 650
Business entertaining 520
general bad debts provisions 200 7,890
14,850
Deduct
Income not taxable as trading income
Rental income 1,200
Bank interest receives 80 1,280
Trading profits 13,570
QUESTION 2
Criteria for the use for employment for self employment, why people prefer self employment:
Employment is paid employment contract between the employers and the employees.
Usually, the boss regulates what employee does including where employee works. Employment
is contract between employer and employee to offer some benefits to employee. In exchange, the
employee shall be paid salary or even hourly salary. While workers may discuss such things
in employment arrangement, terms and conditions decided solely by employer. The contract can
also be terminated by all parties. An employment arrangement with a particular employee may
be verbal exchange, written correspondence, or letter of work offer. The proposal of employment
could be implicit in interview or written in formal, official employment agreement. Employment
arrangements vary, since they can require various time obligations and pay-out systems (Clarke
and Kopczuk, 2017). For e.g., jobs may be as follows: