I complete a very simple SA return for a car valeter. In year end April 2011 he purchased a van, details of which I included on his return for that year. In the year ended April 2012 he has had an accident, the insurance company vastly under valued the van (it had quite a lot of 'fitting out' which they did not take into account); in round figures the van cost £4500 the fit out £1500 and the insurance pay out was £3500. He could not afford to replace the van and now works for a garage but still in a self employed capacity.
Can anyone advise me how I report this on the SA return?
Many thanks
Mandy Whitfield
__________________
Mandy Whitfield
Croft Administration
VA & Bookkeeping Service
The van from an accounting viewpoint will need to be written off so will depend what the NBV is at the end of 2011 as that will be the loss on disposal. This however will be disallowed when doing the tax return.
Assume that the van was put in the general pool for P&M and as no disposal value then the general pool will just get normal WDA if there is any value if AIA has previously been claimed.
The insurance receipt is to cover the cost of replacing the asset. The fact that the owner didnt is their choice and the receipt is taxable.
