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 £1,250,000 (£1,000,000 x 15/12). Accordingly, the capital allowances for the 15-month period will be 100% of the cost incurred of £310,000.

(ii) Business is a company
For a company, the 15-month period of account ending on 30 September 2021 must be split into two accounting periods: one for the first 12 months ending on 30 June 2021 and the other for the remaining three months ending on 30 September 2021. The machinery purchased on 1 September 2021 falls into the second accounting period.


Main pool £

Allowances £
Three-month period ending 30 September 2021  
Additions qualifying for AIA310,000 

AIA (maximum £100,000 x 3/12)



WDA (18% x 3/12)(2,700)2,700