Question: Billy Brown is a self-employed baker. The following data relates to his accounting year ended 31/12/2020. Sales 163,000 Baking materials 113,000 Gross profit

Billy Brown is a self-employed baker. The following data relates to his accounting year ended 31/12/2020.

£ £

Sales 163,000

Baking materials 113,000 Gross profit 50,000

Less expenses:

Depreciation 4,500

Motor expenses 5,400

Accountancy fees 1,200

Stationary 200 11,300

Net profit 38,700

Motor expenses relates to his van. This is used 20% for private mileage.

Billy wishes to claim annual investment allowance relating to his van. The van was bought for £18,000 in January 2020.

Required:

Calculate the capital allowances claimable by Billy for the accounting year ended 31/12/2020
Calculate the adjusted profits for the same period, after taking into account the capital allowances.
Calculate the trading income assessment for Billy for 2020/21.

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