Hi I am new to the forum and would like to ask a question please.
I am completing a tax return for somebody and am a little out of practice and finding the HMRC helppages quite unhelpful.
My client has spent £3900 on equipment - does this go into box 22 the annual investment allowance box? on the self employment pages AND can I use the full amount in the first year?
She also has depreciation expenses in her accounts -as she has no other assets should I assume she has calculated this as the depreciation of the equipment? and therefore remove this from the accounts and she has claimed AIA for the equipment?
Depending on what the equipment is, you can usually claim 100% AIA less any add-back of private use proportion.
I only mention this as you're using the Short Self Employment pages, but if taxable profits are less than say, £12000, consider if capital allowances might be better used in subsequent years.
She should give you her depreciation and any other calculations made but yes, it gets added back before arriving at taxable profits.
