A friend has just asked for advice on a tax return. Can her partner claim the whole cost of van, computer and tools on his first tax return? I've only ever done my own tax return and don't have any of these so wanted to double check. I have looked at HMRC and Business link but am now confusing myself over capital allowances so if someone can explain it in child speak I would really appreciate it.
If you look at SA Helpsheet 252 (Capital allowances and balancing charges) it explains how AIA works. Essentially you can claim up to £50k of qualifying expenditure in the year. Does include vans, equipment, furniture and technology, doesn't include cars.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
May also be NOT worth claiming AIA if they are going to account for depreciation on the assets in following years as depreciation is non-allowable, it will increase tax liability in subsequent years.
You mention first tax return - where the chargeable period is less than 1 year, the allowance is pro rata'd down. So if he was only self employed for 6 months, the AIA would be £25k.
Thanks for all your replies, I'm going round to see if I can help him tomorrow, I think his first period is only a few months, got a feeling he only started trading in January/February time last year but will find out more tomorrow.
