Clockwork

Originally Posted by Winston001

Just a quick note: if you aren't making a profit, you aren't making money. The problem is many people think what you express above - I used to as well.

Here's how it actually works: you buy a block of land or building. You borrow the money. In the first year you make mortgage payments of $20,000. You think you can deduct all of that from your gross business turnover right? Wrong. Lets say $10,000 is interest - that is deductible. But the other $10,000 is reduction of debt - and that comes out of your income = taxable.

Its exactly the same for your business vehicle - loan repayments apart from interest are taxable income. Capital sums.

There is a lot more which can be said on the topic but this isn't the best thread for it. I see Labour are attacking farmers now so we can discuss that elsewhere.

I'm no accountant, Winston but I think you're looking at this as a private individual. If a business buys an asset, the cost of that purchase is deducted before any profits are declared are they not? The farmer pays himself minimum wage 'cos he's just barely getting by but the company he owns has just become worth more. Of course as there is no Capital Gains Tax, so eventually it all ends up in his bank account tax free, yes?