Income and Provisional Tax

[Brucanna]

@eko

As for paying one-self a salary and deduct it as a business expense as sole proprietor you are right that this mostly is not acceptable by tax authorities.

I don’t know of any tax authority which objects or prevents the tax payer from setting up their Financial Accounts as Management Accounts, which is where a sole trader could adopt deducting a salary etc from below the “Trading Profit before Sole Trader Expenses” sub-total.

All the P&L transactions above the “Trading Profit before Sole Trader Expenses” sub-total would equate to or represent any tax authority requirements - if they exist.

Those that insist that their Financial Accounts must only ever exactly match their tax filings, are just being lazy management that is why I wholeheartedly endorse:

@eko

Even in case of sole proprietor I think that for financial management reasons it would be good practice to: 1) pay one-self a salary using payroll

The only point to clarify is if the salary being recorded is pre or post tax.
If the salary is 20,000, is the tax payable being paid of that, if yes, then the tax payable is a BS transaction, but if the tax payable is in addition to the 20,000 then it is a P&L transaction.

[eko]

@Brucanna

I don’t know of any tax authority which objects or prevents the tax payer from setting up their Financial Accounts as Management Accounts

You are right