1910249 WC: 2999
Module: Commercial and Tax Law (36082)
Student Number: 1910249
Word count: 2999
Questions answered:
Q2) Income Tax Problem Question
Q3) Domestic Sale of Goods Problem Question
Q4) Essay Question
, 1910249 WC: 2999
Q2.
Adil will be liable to pay income tax on the full profits of the trade as the business operates
within the meaning of a ‘trade, profession, or vocation’1. He will not be subject to the rules
for small businesses as his trading receipts are deemed to be in excess of £150,000.00 for
calendar year 21/22. His tax liability will be calculated on a deemed earning basis by
deducting any allowable expenditure from taxable receipts.
Travel expenditure
It is unlikely that Adil’s travel from his home to the unit could be allowable expenditure since
it is not ‘wholly and exclusively’2 for the purpose of business as it involves a personal
element.3 Yet, travel from Adil’s home directly to customers could be allowable expenditure
because Adil is an itinerant trader.4 His home is his base, where he keeps his van and
completes paperwork. Adil operates within a 30-mile radius of his business unit, which is in
accordance with the limit of 50 miles specified by Salmon LJ.5 There is also no dual element.
Whilst travel expenses from his home to the unit will be excluded due to the dual element,
travel from the unit to customers will be an allowable expense since this is his base of
operation.6
1
s5 Income Tax (Trading and Other Income) Act 2005
2
S34 ITTOIA
3
Mallalieu v Drummond [1983] STC 665 HL.
4
Horton v Young [1972] 1 Ch 157 CA.
5
Samadian v HMRC [2014] UKUT 13 TC.
6
Ibid.
Module: Commercial and Tax Law (36082)
Student Number: 1910249
Word count: 2999
Questions answered:
Q2) Income Tax Problem Question
Q3) Domestic Sale of Goods Problem Question
Q4) Essay Question
, 1910249 WC: 2999
Q2.
Adil will be liable to pay income tax on the full profits of the trade as the business operates
within the meaning of a ‘trade, profession, or vocation’1. He will not be subject to the rules
for small businesses as his trading receipts are deemed to be in excess of £150,000.00 for
calendar year 21/22. His tax liability will be calculated on a deemed earning basis by
deducting any allowable expenditure from taxable receipts.
Travel expenditure
It is unlikely that Adil’s travel from his home to the unit could be allowable expenditure since
it is not ‘wholly and exclusively’2 for the purpose of business as it involves a personal
element.3 Yet, travel from Adil’s home directly to customers could be allowable expenditure
because Adil is an itinerant trader.4 His home is his base, where he keeps his van and
completes paperwork. Adil operates within a 30-mile radius of his business unit, which is in
accordance with the limit of 50 miles specified by Salmon LJ.5 There is also no dual element.
Whilst travel expenses from his home to the unit will be excluded due to the dual element,
travel from the unit to customers will be an allowable expense since this is his base of
operation.6
1
s5 Income Tax (Trading and Other Income) Act 2005
2
S34 ITTOIA
3
Mallalieu v Drummond [1983] STC 665 HL.
4
Horton v Young [1972] 1 Ch 157 CA.
5
Samadian v HMRC [2014] UKUT 13 TC.
6
Ibid.
