Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › qualifying interest paid , is it deducted twice ?
- This topic has 2 replies, 2 voices, and was last updated 6 years ago by zhengcsc.
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- September 29, 2018 at 1:37 pm #475977
Dear tutor,
May I ask a question about qualifying interest paid ?
Suppose I am a sole trader, I borrowed some money from the bank to buy a plant for my business.
my sales was 90,000 this year,
my cost of goods was 40,000,
and the interest I paid to the bank was 10,000.When it comes to Non-saving income( same as total income),
it is 90,000 – 40,000 – 10,000 = 40,000.
The 1,000 interest is deducted in trading profit.Then, as the 10,000 interest is a qualifying interest paid,
my net income is 40,000 – 10,000 = 30,000.This is my question, why the 10,000 interest is deducted twice ?
first time in trading profit, second time in qualifying interest paid.I dont think it`s right, could you tell me where I am wrong ?
Thanks.
October 2, 2018 at 12:39 pm #476136The interest payment by the SOLE TRADER is an allowable deduction against the trading profit of the sole trader only – but it is not a qualifying interest payment
October 3, 2018 at 9:01 am #476201Thanks !
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