what is the difference between depreciation in account books
and depreciation as per income tax act
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Answer Posted / barodianbuddy (acca)
In general accounting any method of depreciation can be used for calculating accounting profit but while calculating corporation tax, Taxable profit is calculated and in that HMRC disallows depreciation on fixed assets.
According to UK tax law (HMRC)
Depreciation on fixed assets is disallowed for corporation tax purposes. Companies are instead allowed a fixed writing down allowance on certain capital expenditure such as expenditure on plant and machinery.
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