Test your understanding
(1). State whether the following statements are true or false in respect of a trader commencing a new unincorporated business.
A Expenditure incurred in the seven years prior to the commencement of trade is treated as having been incurred in the first tax year of trading.
B Under the accruals basis, capital allowances are given in respect of the cost of assets purchased for use in the business prior to the commencement of trading.
(2). Martyn established a new unincorporated business and began trading on 1 July 2024. He elects to be taxed on the accruals basis and will prepare accounts for the 15-month period ending 30 September 2025. Initially he rented the machinery he required but, on 1 September 2025, he purchased machinery for £1,100,000.
What are Martyn’s capital allowances for the 15-month period
