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Hello,
I have attempted this question but I can’t understand why John’s use of office in his private home and the use of telephone for business have been deducted from the net profit figure at the start of the answer ? Could you pls help me ? It’s been eating away at my brain !John, as with most sole traders, will put items of expense in their accounts to calculate the net profit. This includes business telephone use and use of home.
And for accounting purposes it is acceptable.But the tax laws require that some items which are in the accounts are not acceptable for tax pusposes – so we have to adjust them as in this question – to find the taxable profits to go in the IT computation.
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