Unincorporated Business Profits
Tax-adjusted trading profits, capital allowances, basis periods and allocation between sole traders and partners.
How to study the ATT Qualification
Use Finance Act 2025 for the 2026 tax papers, complete the three foundational CBEs early, apply professional ethics throughout and concentrate option practice on the one paper you will enter.
Core concepts
Concept 1
Taxable trading profit starts with accounts and adjusts for tax rules, private use and capital expenditure.
Exam cue: Reconcile accounting profit to taxable profit line by line.
Concept 2
Capital allowances replace accounting depreciation for qualifying expenditure.
Exam cue: Identify the qualifying asset, pool, allowance and disposal treatment.
Concept 3
Sole-trader and partnership profits follow the tax-year basis and allocation rules in the current syllabus.
Exam cue: Allocate partnership profit only after computing the firm's taxable result.
Risk pitfalls and guardrails
Deducting accounting depreciation for tax.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Ignoring private-use restrictions or pre-trading rules.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Allocating accounting profit instead of the tax-adjusted partnership result.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Memory anchors
Tax adjustment
Add back disallowable expenses and deduct tax-allowable amounts.
Capital allowance
Classify expenditure before choosing the allowance and pool.
Basis
Match taxable trading profit to the relevant tax year.
Partnership
Compute the firm result, then allocate using the valid profit-sharing arrangement.
Records
Support each adjustment with accounts, facts and tax authority.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A sole trader's accounts show profit of £52,000 after charging £3,000 depreciation and £800 client entertaining. Capital allowances are £5,500. What is adjusted taxable profit?
A supplier invoice totals £9,000, but £600 relates to goods bought solely for the proprietor's private use and never enters trading stock. What amount is deductible as business purchases?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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