TAX

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hello is anyone able to help me with personal tax. I don't understand what they are and why you deduct income charges, also what is the difference between these charges and the charges you pay tax on such as royalties and patents? Thanks in advance for your help.

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:TAX

    Hi
    Charges on income are deducted from income as a form of tax relief.
    The tax relief is a form of incentive i.e.individuals/employees to invest in partnerships or close companies etc. Interest on these loans (known as qualifying loans) taken out will be the charge on income.
    The effect is to reduce statutory total income and in turn reduce taxable income.
    With royalties, you will need to remember that copyright are paid gross and patent royalties are paid net which you will need to gross up on the tax computation.
    All these charges plus other qualifying loan interest are classed as charges on income and therefore can be deemed as tax relief.
    Hope this is of help.

    Sharon
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:TAX

    Can you give me some examples of charges on income.
    Is copyright a charge on income which is deducted from the personal tax computation for the person paying it, and the person receiving it includes the interest on it as taxable income? I have looked it up on the internet and can't find much re this topic. Many thanks for your help

Categories

Privacy Policy