Assuming David is carrying on a ‘building trade’ which means the profits from his development are taxable under the Income Tax (Trading and Other Income) Act 2005; David asks how much profit will actually be taxable.

David Davis Trading as Davis Builders Trading Statement to 5th April 2021

	£	£
Sales proceeds Rose House	278,350
Handyman services	3,200
Income		281,550
Cost of sales
Plot of land	25,600
Sub contractors	22,189
Other materials	72,592
		(120,381)
		161,169
Gross Profit
Operating expenses:
Van purchase	15,680
Van running costs	12,184
wages	16,350
Clothing	135
Legal fees	1,440
Total operating expenses		(45,789)
Profit before interest		115,380
Interest		(3,175)
Profit		112,205

Required:

 Calculate taxable trading profit for David’s ‘building trade’ for the year ended 5 April 2021. [Your answer should indicate by the use of zero (0) where items have been considered but no tax adjustment is required.]

Calculate David's income tax payable for the 20/2021 tax year