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Trading Profits for Self employment payment

which figure will HMRC use

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HI There


I hope you are all smiling an keeping safe during these distressing times!  I am calculating the self employment payment for my self employed clients - I understand how it's worked out - that's simple enough - however, which figure are they using - i understand they say trading profits .  The question is this trading profits before or after capital allowances.  To me, any profits after capital allowances are adjusted net profits.   I have asked several of my accountant friends and we are all divided!

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By memyself-eye
30th Mar 2020 18:02

Yes, one of those...…


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Red Leader
By Red Leader
30th Mar 2020 18:12

I think by trading profits they are using a tax rather than accounting definition. In other words, the profits of a trade.

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Accountants & Tax Advisors
By Gladstone
31st Mar 2020 10:02

Accounting profit is understandably higher in most cases, however, taxable profit as per tax calculation will be used. As you rightly mentioned, people are divided my position would be to use trading profit before capital allowances otherwise they stand to be disadvantaged for doing the right thing (investing in capital assets). I would use trading profits before capital allowances. To be cautious for clients, I would wait until further information from HMRC becomes available.

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