Obviously assets bought for purely business use will be considered capital, but there seems to be a lot of grey area. For example is the trader completely free to choose what part of his savings to declare as business capital, is their any benefits or disadvantages in doing so?
What about assets that are used for personal and business use?
Obviously assets bought for purely business use will be considered capital, but there seems to be a lot of grey area. For example is the trader completely free to choose what part of his savings to declare as business capital, is their any benefits or disadvantages in doing so?
What about assets that are used for personal and business use?
Basically, you can claim capital allowances on the purchase of assets. The amount you can claim depends on the asset.
For example, you can claim an Annual Investment Allowance of 100% of the cost of the purchase of plant and machinery up to a maximum of £25,000 (2012/13). Anything over £25,000 and you would have to apply the writing down allowance which would be 18% on the written down value for main pool item and 8% on the written down value for special pool items such as long-life assets.
You can also claim an allowance for motor vehicles. The rate depends on the CO2 emissions.
If you have assets which are used for both the business and personal use, you can still claim allowances for the business proportion of the cost.
