8.5

(a) A motor car with a retail price of £21,000 is leased for six months at a total cost of

£2,940. The car is used for trade purposes and has an emission rating of 182g/km.

How much of the £2,940 should be disallowed when calculating trading profits if:

(i) the lease began on 1 July 2009?

(ii) the lease began on 1 January 2009?

(b) A sole trader is granted a 15-year lease on premises which he uses for business purposes. He pays a premium of £15,000 and writes off £1,000 per year in his business accounts. How much of the £1,000 should be disallowed each year when calculating trading profits?