This is a doubt from Q32 page 28, answer 32 page 139 of the BPP revision kit.
For calculating the Discounting factor of the Tax on Payments why have they taken the Years 1-5 factors – the year 1 factor, and not years 1-4 factor – year 1 factor?
Is this because tax is payable one year in arrears. My doubt is why are we using the fifth year when the lease lasts only for 4 years ?
For calculating the Discounting factor of the Tax on Payments why have they taken the Years 1-5 factors – the year 1 factor, and not years 1-4 factor – year 1 factor?
Is this because tax is payable one year in arrears. My doubt is why are we using the fifth year when the lease lasts only for 4 years ?
