Albus began trading on 1 January 2019 preparing his first set of accounts for the twelve months to 31 December 2019.

Albus's draft profit and loss account for the year ended 31 December 2019 shows a trading profit of 123,955 after accounting for the following items.

	Notes
Interest income on business account		200
Lease rental	1	1,500
Legal fees	2	950
Depreciation		4,550
Car expenses (100% of costs incurred)	3	2,448
Repairs and redecoration		3,967
New furniture for office		1,000
Wife's salary	4	9,000
Write-off of obsolete stock		800
Advertising	5	6,788
Goods taken for own use worth 800, charged at cost		700
A speeding fine incurred by Albuss wife while making a delivery		60
Donation to Comic Relief made through gift aid	6	50

Notes

1 Albus rented a car with CO₂ emissions of 140g/km for the year.

2 The legal fees relate to legal advice taken to assist Albus in purchasing a small 6 year old workshop to operate out of in January 2019.

3 Albus accepts that the actual business use of his car is only 90%.

4 Albus's wife has worked in the business on average two days per week over the course of the year. However, similar staff employed by the business only earn 5,000 for two days per week.

5 Advertising includes 2,000 for corporate hospitality attended by business customers at a local sporting event. It also includes 400 relating to the purchase of 10 handbags bearing the company logo which were given to key clients.

6 Comic relief is a UK registered charity.

In addition Albus paid 500 for stock in November 2018 which was before he actually commenced trading. This 500 has not been included in his draft figures shown above.

Albus's bookkeeper has correctly calculated his capital allowances to be 3,455. However Albus forgot to mention the acquisition of his low emission car for 9,000 in August 2019. Albus estimates his business use at 90%. The car qualifies for the 100% FYA for capital allowances.

Requirements

1. Calculate Albus's tax adjusted trading profit for the year ended 31 December 2019. (16 marks)

Calculate the assessable trading profit for Albuss business for 2018/19 and 2019/20 and state the amount of any overlap profits arising.