Commentary

B5.640 Calculation of income from hire-purchase trading

Business tax
Business tax | Commentary

B5.640 Calculation of income from hire-purchase trading

Business tax | Commentary

Hire-purchase trading

B5.640 Calculation of income from hire-purchase trading

If a business consists of the sale of commodities on hire-purchase terms, the profits or gains arising after due allowance for expenses incurred in the normal course of business are assessable as trading income. The special points which call for consideration in computing the amount of profit or loss of a hire-purchase business, are calculating income and allocating the income to accounting periods, and determining the amount to be allowed for bad debts.

Under a hire-purchase agreement, the owner of goods agrees to let them on hire to another person, who

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