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chellawson


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Personal Taxation advice
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hi everyone,

Need a bit of advice on personal taxation.  My dad has ask me to take over doing his books for him, ive just done his tax return and am now doing his year end, he has given me his account from previous years but at the bottom of his accounts it has "written down value brought forward" for van and car which is fine, it also has "writing down allowance 25%" which im not sure about and also " first year allowance 50%" but this is on three years worth of accounts. Can anyone offer some guidance?

I was looking at this book Personal Taxation Tax year 2009 2010 would this be a the correct book to buy?




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Michelle
chellawson


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Am I right in saying that the writing down allowance for vehicles is now 20% as of 2009 but as the Van was purchase before then I can still put it down as 25%?

With regard to the car the Write down allowance the figure are:

3,605
.8x(901)

2,704

My sound really dumb but what is the calculation for .8?
I worked out everything else as I said but can,t work this bit out.



-- Edited by chellawson on Sunday 4th of July 2010 05:12:21 PM

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Michelle
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Michelle

Not sure why its written as .8 but this is the 25% allowance ie 3605 x25%.

When you have assets, you can claim capital allowances and these are claimed in the form of written down allowances or WDA. The assets are made into a pool depending on what they are, so here you have a car and a van in the pool. Each year you will take the b/f balance, calculate the 20% of this balance, which is the amoutn you can claim and then deduct it from the b/f balance to then carry forward to the following year.

Not sure if you're saying that the first year allowance is on all 3 years? I think this should only be for the first year only. And I don't think the purch date matters as to what % you can claim, its the year of the claim that matters, so from now on its 20% per annum.

I think thats right, btu wait to be told otherwise!

P

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RobH


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Hi Michelle,

I am guessing here, but I think the 0.8 is probably a memorandum to the previous accountant that the car is 80% business use, 20% personal and as such only £901 x .8 will be allowable. Usually theer is a 'personal Use (PU) column in a manual calc.

Rob

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Rob
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BackOfficeGroup


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Rob

Good thinking. But is it not the amount claimed that is deducted from the b/f figure and not the total amount? Thus making 3605 - 720 = 2885 or do you write down the whole amount but only claim for the business use element?

I must admit I didnt know that bit.

P

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RobH


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Hi Phil,

The total amount is written down and only the business use claimed. So the b/f figure would be 2704.

Rob

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Rob
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BackOfficeGroup


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cool, makes sense.

thats my 1 new thing learnt for today, now I can relax!!

P

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RobH


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Excellent...I may make a rule of as soona as I have invoiced out £200 I'll take the rest of the day off! (I'll be here all day unfortunately!)

Rob

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BackOfficeGroup


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Id best be off then!!

biggrin

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chellawson


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Thank you everyone for your help, yes it all made sense.

Have to pop out but have another question regarding the same but will post it later.

Hope everyone is having a lovely day so far.



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Michelle
adi2402


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And if the general pool has a balance of less that £1000 (before any claim) you can potentialy claim the whole pool as a capital allowance deduction.  Someone else will be able to point you to the relivant legislation if neeed be or you can find it on HMR&C website).




-- Edited by adi2402 on Monday 5th of July 2010 12:23:22 PM

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BackOfficeGroup


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Adi

I keep thinking your Shaun as you have JR as your avatar!

P

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Peasie


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BackOfficeGroup wrote:

Adi

I keep thinking your Shaun as you have JR as your avatar!

P


So do I.

 



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chellawson


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The pool has not reached the £1,000 yet so will keep with the 25% but will remember that for the future.

1) When Im doing the year end do I do the figures for Gross earning (CIS payments have been made) and do I gross figures for expenses for expenses etc ( Dad is VAT registered.
Im thinking it should be the net figures as as VAT has been claimed and CIS has been deducted?

2) On the expenses side I have Motor - van +8/10 car?
Im thinking, total costs for the van (fuel, mot, tax etc) plus 80% of the running costs for the car?

When I do the self assessment do I send the year end report with it?

Ive got a couple of years worth and some have been done by a different accountant, they seem to have different way of writing the calculation down. Ive got to write to the accountant to get the accounts for 2009 as Im working with the accounts from 2008.

Hope it all makes sense.

Thank you for your help everyone.


-- Edited by chellawson on Monday 5th of July 2010 05:40:45 PM

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Michelle
adi2402


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BackOfficeGroup wrote:

Adi

I keep thinking your Shaun as you have JR as your avatar!

P


yeah its too similar I'll get round to changing it shortly.

 



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Forgive the typo's I generally do not proof read. Just lazy I guess!
Shamus


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Nar, we're easy to differentiate.

It's big JR and little JR.

I've read your posts Adi and all very sound advice so I've got no qualms at all about sharing an avatar with you.

Just keep up the good work whilst I'm off on a client site.

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Shaun

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.
RobH


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Hi Michelle,

1. I take it your dad is a CIS subbie? If so then his total turnover before CIS tax has been deducted but net of vat will be declared. Expenses will be shown on the accounts net of vat so on both points you have that right.

2. I would show on the accounts (though others differ) the full amount of car expenses. I would then add back 20% of these expenses when doing the tax computation. I have seen accounts where on the face of the P&L it would say something like 'Motor expenses (80%). I don't think there is a problem with that but I much prefer to be able to show Mr Taxman that there are disallowed expenses, especially when it comes to motoring.

Hope that helps,

Rob

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BackOfficeGroup


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I'm with Rob on the motoring expenses side, its what I've always done.

P

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adi2402


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Shamus wrote:

Nar, we're easy to differentiate.

It's big JR and little JR.

I've read your posts Adi and all very sound advice so I've got no qualms at all about sharing an avatar with you.

Just keep up the good work whilst I'm off on a client site.



Cheers.



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Forgive the typo's I generally do not proof read. Just lazy I guess!
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