Hi, One more question about the practice questions at the end of the chapter i) the know amount of of "retainer fee" to be paid ..." : answer suggested it is indirect external expense so not allowed. but isnt that because it is not incurred therefore not allowed? ii) an estimate of the total salaries ... : the answer suggested it is indirect internal expense and not allowed. the reason of not allowed is that because it it is "estimate" instead of incurred? thank you very much for your time
1) the implication is that the retainer fee is definitely going to be paid and is therefore incurred, it just hasn't been paid yet. 2) estimates may be allowed in tax calculations (don't forget a lot of claims are estimates too - at least for the outstanding part). More importantly, bear in mind that the Core Reading in this chapter is not definitive. It only covers potential taxation rules, as the idea is that Subject SA3 is not UK specific. In practice, there are many ways that taxation rules may work around the world.
