Can someone describe a Business Purchase

First post here, but posted a lot in StackOverflow but looking to go solo now, so question number one:

Business Purchase I know what this means but want to check..

What I think it means:

I have a net income of £10,000pa from my sole trader business
I am Taxable on £1895 of that (so 20%=£379 in simplest forms). HOWEVER
Say I buy something worth £100 which is totally for my operating as a company, so I declare as a business purchase SO
only have to pay tax on £1,795 so in tax I will pay £359?

Can someone confirm please thats right, or provide a definition if its wrong!

That's absolutely correct.

Therefore, if you spend £1895 this year on business purchases, you don't have to pay any tax at all. If you spend even more, it is considered loss and this can be counted against your future income (or current income from other source like salary), making part of it non-taxable.

Of course, it should be clear that it is business related cost. Almost anything can be considered business related cost, depending on what you do and on specific situation. When in doubt ask local accountant.