In terms of deductions allowable, apart from being incurred wholly and exclusively for the purposes of the trade. The expenses must have been actually paid in the accounting period.
No deductions are generally allowed for items which are of a capital nature such as the purchase of property, when calculating the taxable profits. However, under the cash basis the costs of most plant and machinery are deductible. One key exclusion is the purchase of cars.
Relief for interest payments
A maximum of £500 can be claimed if you have a business loan or overdraft only interest payment. If you wish to claim more interest as a deduction, then this could be treated as a change of circumstances. As a result, you will have to prepare your accounts on the accruals basis.