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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am a partner in a small retail business (husband and wife

Resolved Question:

Hi,
I am a partner in a small retail business (husband and wife team).
A few years back we borrowed the money to buy the freehold premises we now trade from.
I do the end of year accounts myself! So far each year I have been taking the interest portion of the repayments as a business expense against our profits.
However as the years pass by on the loan, the interest portion of each payment is obviously less, meaning that I am now actually paying out approx £12000 PA but only able to offset £1500 of it against my profits (£10500 adrift).
As I see it, my taxable income on paper for example might be £40,000, but I am only actually making £29,500 in reality.
I realise it's a bit late to be asking this question now, but am I doing this correctly?
Thanks
Barry
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello Barry, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Bad news, I regret; your accounting and taxation treatment has been entirely proper. You are merely being overtaken by events with the interest element falling and the business loan reducing.

I am so sorry to have to rain on your parade.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your support.