CAPITAL ALLOWANCE is known as tax-allowable depreciation. it is depreciation computed in accordance with the prevailing tax rules.
permanent. Principles applicable this year ( tax year or financial year) may not be applicable next year. I always advice my students to do everything possible to pass this paper at once before new rules become applicable
Depreciation prepared according to the accounting standards is not an allowable expense for the computation of TAX ADJUSTED TRADING PROFIT OR LOSS. Although, this will be included in the financial statements submitted to HMRC by companies OR unincorporated entities, it is not an allowable expense for tax purpose. Accounting standards have acceptable Continue reading CAPITAL ALLOWANCE – UK TAXATION 2