Own consumption - Hairdresser

Own consumption - Hairdresser

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Have read a few threads on subject of own consumption and still struggling to understand why goods taken for own use can't simply be debited at cost to drawings as if the owner had purchased directly out of own funds. It seems that the only benefit is to visibly demonstrate to HMRC that private consumption has been adjusted for, cost not overstated and any enquiry possibly averted.

Just doing the first year's accounts for a hairdresser who takes about £15 a month stock for personal use and wondering which way to jump so to speak.
Louise

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By AnonymousUser
17th Mar 2008 14:39

Goods taken
It does seem an odd practice the actual reason initially for goods to be taken at sales price was a decision by the house of Lords in 1953 (Sharkey v Wernher) The business must make a profit out of the proprietor, so all goods must be taken at sales price.

Len

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By simong0516
16th Mar 2008 11:04

To be incorporated into ITTOIA 2005.
It was announced in the budget that the rules on appropriation of trading stock by a trader are to be incorporated into ITTOIA 2005 as section 172B (2) as follows:-

'In calculating the profits of the trade -

(a) the amount which the stock appropriated would have realised if sold in the open market at the time of the appropriation is brought into account as a receipt'.

Simon.

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