How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4948
Type Your Tax Question Here...
bigduckontax is online now

I am a partner in a small retail business (husband and wife

This answer was rated:

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?

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

Thank you for your support.