Is there a technical difference between tax relief and allowable expenditure?
Is 'allowable expenditure' technically a specific type of tax relief, or is it a different thing?
Is it correct to say: when you work out gross income, it is before tax is taken or relief is applied but after allowable expenditure has been deducted?
I feel that the difference is that tax relief is being let off for something that you would normally have to pay tax for but expenses are your costs incurred in the revenue process before you get to the issue of tax or tax relief. Are the two legally distinct? Is there any document or case that confirms this?
Please clarify or tell me if i'm wrong.
Thanks
Replies (7)
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In short...
...yes. The long answer will likely be more clear if you tell us the reason behind your question.
"Gross income = turnover"?
Is this for self employment?
Surely, in that case they would want profit before tax?
Gross income
In this context it means the gross of all income, so if you have more than one source of income you add them all together.
Before tax means just that, ie. taxable income.... not net income after tax.
You gross income for this
Your gross income for this purpose is clearly the profit shown in your accounts.
No your gross income, as I said, is the profit shown in your accounts. That will be your sales less all your expenses, not just the ones that are allowable for tax