Financial Accounting: A comprehensive and practical online guide for the basics of financial accounting
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In working out your business profits you should not deduct the cost of buying or improving items such as the car , equipment and other tools that you use in your business or the depreciation or any other losses which arise when you sell them. Instead, you can claim tax allowances called capital allowances. These are deducted to arrive at your taxable profits. An adjustment, known as a balancing charge, may also arise when you sell an item, give it away or stop using it in your business. Balancing charges must be added back to arrive at your taxable profits. More information can be found in Helpsheet...
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