QUOTE(nick67 @ Dec 8 2012, 10:26 AM)
Hi guys, I have some questions regarding taxation.
Let's say I'm a middleman between 2 parties. Buyer is from overseas while seller is based locally. I earn a commission each time they have a transaction.
Right now, I been collecting cheques which I haven't banked in because I'm trying to reduce my tax liabilities each year. So now kind of sticky as this year I bank in last year's cheque and this year keep for next year and so forth.
So my question is, is my commission based income taxed on an accrual basis(taxed when receivable) or on a cash basis(taxed when bank in)? My thinking is that it's on a cash basis since I would have no idea when they had any transaction, and I could be receiving cheques for last year's dealings between them.
Another question I would like to ask is there any way I could reduce my chargeable income? Last year it was suggested that I get someone to sign off some vouchers as allowance for them and I did. Is there a way for Inland Revenue to dispute this? Is there any other methods I could use?
Lastly, I have no idea how, but about 6 or 7 years ago my tax guy manage to make up quite a substantial loss for my business, and the losses were carried forward for 2 or so years. Since we are only required to keep our financial documents for 7 years, will they be able to demand to audit my accounts (which has business loss) after this 7 years?
Thanks for any input on this matter.
the method u using must be consistent year by year, let say first year using cash basis, next year u must apply cash basis.
Your business is fall under business income, can try to reduce by those allowable expenses, or claim Capital allowance by purchasing office equipment etc.
QUOTE(jes88 @ Dec 8 2012, 10:48 AM)
regarding the broadband claim, my broadband aka postpaid contract from julai 2012-jun 2013, can i claim it on next year? need to collect every month bill as prove?
U can claim your broadband from July-Dec 2012 under YA 2012, Jan-Jun 2013 will fall under YA 2013