If I am not claiming AIA as it is not beneficial to the client is the purchase still included in the accounts and then deducted on the tax computation.
I have always struggled with the concept of my accounts not matching my tax return!
Thanks in anticipation of your replies
Valerie
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Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
AIA is allowable on qualifying capital expenditure. If you do not claim it, it will still be in the accounts (on the Balance Sheet) as an asset. In the accounts you will depreciate it accordingly (shown in P&L and BS). When doing tax comp, you would add back the depreciation as depreciation is not allowable for tax. This is the reason why your profit in your accounts differs from your taxable profits since you will start the comp with your net profits per the accounts and make a number of adjustments (add back depreciation, personal use of motoring , entertainment etc).
AIA is allowable on qualifying capital expenditure. If you do not claim it, it will still be in the accounts (on the Balance Sheet) as an asset. In the accounts you will depreciate it accordingly (shown in P&L and BS). When doing tax comp, you would add back the depreciation as depreciation is not allowable for tax. This is the reason why your profit in your accounts differs from your taxable profits since you will start the comp with your net profits per the accounts and make a number of adjustments (add back depreciation, personal use of motoring , entertainment etc).
I know it may sound crazy but I have never come across a tax computation in my studies or since.
I have always just made my own up by producing a tax summary for the client which seems to do the job but is maybe not entirely professional.
Do you know of anywhere I could get a sample to follow?
Thanks Valerie
__________________
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Even if not claiming AIA or cap allowances remember to add this addition into your capital allowances pool to be carried forward to next year whene you will be able to claim standard capital allowances on it.
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Forgive the typo's I generally do not proof read. Just lazy I guess!
