Taxation of the unincorporated business for ATX (UK) - part 4: self-test answers

Test your understanding: answers


Statement A is false.
Expenditure incurred in the seven years prior to the commencement of trade is treated as having been incurred on the first day of trading.

Statement B is true.


Business is unincorporated
The annual investment allowance will be increased to £250,000 (£200,000 x 15/12). Accordingly, the capital allowances for the 15-month period will be 100% of the cost incurred of £180,000.

(ii) Business is a company
For a company, the 15-month period of account ending on 30 September 2019 must be split into two accounting periods: one for the first 12 months ending on 30 June 2019 and the other for the remaining three months ending on 30 September 2019. The machinery purchased on 1 September 2019 falls into the second accounting period.


Main pool £

Allowances £
Three-month period ending 30 September 2019  
Additions qualifying
for AIA

AIA (maximum £200,000 x 3/12)



WDA (18% x 3/12)(5,850)5,850