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What does the new fixed rate expense deductions regime involve, and does it meet expectation?
KEY POINTS
- The OTS report on simplifying income tax for small businesses.
- Fixed rate deductions are available on cars and motor cycles and use of home.
- Effect on capital allowance claims.
- Local board and lodging agreements withdrawn.
- Little guidance on record keeping requirements.
In the far distant days when I sat in a lecture room learning about tax for my professional exams I remember being taught the rules that allow a business to claim tax relief for expenses wholly and exclusively incurred for business purposes. There were long lists of deductible items that were very precise and on which the examiners took great delight in testing.
It came as a great surprise to me when I began to practise real tax and discovered that people used approximations. Life was made...
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