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Good Morning
1. if the question says: “.. can claim 50% first year allowances”
or “tax allowable depreciation is available at 50% in the first year” does this mean that CAs start at year 0 or year 1?2. if the question simply states that “tax is 30%” and does not say when the tax is payable, what do we assume?
thanks
There is no such thing as ‘year 0’!
Time 0 is the start of the first year.
Time 1 is one year later – i.e. the end of the first year/start of the second year.
Time 2 is another year later – i.e. end of the second year/start of the third year.
and so on.If you are not told when tax is payable (which is unusual) then state your assumption and you will get the marks.
If there is no delay in the payment of tax then the first payment is at time 1.
If there is a one year delay in the payment of tax then the first payment is at time 2.
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