Billy Brown is a self-employed baker. The following data relates to his accounting year ended 31/12/2020.

Sales 163,000

Baking materials 113,000 Gross profit 50,000

Less expenses:

Depreciation 4,500

Motor expenses 5,400

Accountancy fees 1,200

Stationary 200 11,300

Net profit 38,700

Motor expenses relates to his van. This is used 20% for private mileage.

Billy wishes to claim annual investment allowance relating to his van. The van was bought for 18,000 in January 2020.

Required:

• Calculate the capital allowances claimable by Billy for the accounting year ended 31/12/2020
• Calculate the adjusted profits for the same period, after taking into account the capital allowances.
• Calculate the trading income assessment for Billy for 2020/21.